Study: Local Advertisers Uninformed About Web

Many local newspaper advertisers are willing to consider online ads, but the majority view Web media as simply a free or cheap add-on to offline buys, according to new findings from Borrell Associates and the Newspaper Association of America.

The survey, which questioned ad agencies and marketers like AT&T Wireless , Circuit City , and Gucci America on their local advertising buying habits, found that many believe the Web could help boost branding and sales.

But the survey also determined that a majority of local advertisers had been persuaded to run online ads as part of a reduced-price package deal — rather than through a decision based on the Web’s effectiveness. Of those that had purchased Internet ads, 64 percent said they had done so because of inexpensive or free bundles offered by local papers.

Additionally, there was little consensus among advertisers on exactly what they were looking to the online channel to deliver. Although the study found that 89 percent of advertisers claimed to have specific criteria in mind while making Web media plans, the group cited a dozen different buying criteria. Only 5 percent of the group cited measurability as a significant criterion in helping them plan their advertising.

“Advertisers clearly see the potential of newspaper Web sites for local marketing,” said Peter Krasilovsky, a senior partner at Hampton Roads, Va.-based Borrell, and the study’s lead author. “For too many of them, however, it is a hit-or-miss affair driven more by intuition and peer pressure than market research. There is a sense of resignation that online advertising won’t achieve measurable benefits for them.”

In many cases, Krasilovsky said the situation is restricting advertisers’ spending on newspaper sites from growing beyond 2 percent of their budgets. Newspapers, meanwhile bring in about 16.9 percent of total marketing spending, according to stats from the NAA and McCann-Erickson.

Still, there would seem to be an opportunity for locally-focused sites to educate advertisers, since 58 percent said they expect to see their Internet advertising increasing over time — despite not knowing exactly what they get out of a Web media buy.

The survey also found that advertisers are most likely to turn to the papers’ Web sites for online advertising, rather than city guides, TV stations’ sites, portals or online yellow pages. Ninety percent of the respondents that had advertised online to reach local markets had picked newspaper sites, while 28 percent had used city guides like USA Networks’ CitySearch or AOL Time Warner’s AOL Digital Cities.