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Eileen Pacheco
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Charles Laughlin
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Neal Polachek
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February 7, 2005

Digital Directional Advertising Targeting the Local Marketplace Will Grow to US$10.9 Billion Globally by 2009, According to The Kelsey Group

Princeton, NJ (February 7, 2005) -- Digital directional advertising targeting the local marketplace will grow to US$10.9 billion globally by 2009, according to a new forecast by The Kelsey Group, the leading provider of strategic research and analysis, data and competitive metrics on Yellow Pages, electronic directories, small-business advertising and local search.

The U.S. share of this market will reach US$5.1 billion during the forecast period, comprised of local search (US$3.4 billion, or 66 percent), Internet Yellow Pages (US$1.3 billion, or 25 percent) and wireless platforms (US$400 million, or 7.5 percent).

The Kelsey Group defines “directional media” as advertising that is delivered to potential buyers when they are in the process of making a purchase or buying decision. “Digital directional media” includes Internet Yellow Pages, local search and wireless directory search.

“In 2004, we witnessed considerable product development in local search by Google and Yahoo!,” said Neal Polachek, senior vice president, The Kelsey Group. “In 2005, we expect them to reap some benefits, and we anticipate Microsoft, AOL, Ask Jeeves, FAST and several others will have strong entries into the market.”

Forecast details will be presented at The Kelsey Group’s upcoming conference, “Drilling Down on Local: The Online-Offline Opportunity,” taking place April 18-20, 2005, at the Santa Clara Marriott, Santa Clara, California. This conference will focus on changing consumer behavior, as well as the platforms, products and players that are emerging and evolving to take advantage of the new online-offline reality in the local market. Visit http://www.kelseygroup.com/dd2005/ to learn more about this conference.

Additional Projections and Forecast Dynamics

  • The Kelsey Group expects that by 2009, national companies using digital directional advertising platforms to reach local markets will account for nearly 63 percent, or US$3.2 billion of the total U.S. digital directional advertising market, while small and medium-sized businesses will spend more than US$1.9 billion, or 37 percent of total digital directional advertising expenditures.
  • The Kelsey Group has downgraded its wireless directory search forecast from its previous outlook in 2003, to reflect a market that remains focused on technology—pictures, video, ringtones, games—and is not very far along in delivering search information.
  • The forecast assumes that broadband adoption by consumers and Web site adoption by businesses will continue, and will be key drivers in the development of the market.

About The Kelsey Group
The Kelsey Group is the leading provider of strategic research and analysis, data and competitive metrics on Yellow Pages, electronic directories, small-business advertising and local search. Beginning in 1986, the company has built a reputation as the leading analyst firm covering the directory publishing community, providing advisory (The Kelsey Report® and Interactive Local Media), publishing (Global Yellow Pages™ and Local Media Journal™), consulting (more than 300 individual assignments) and conference services (60 events).

For more information contact:

Eileen Pacheco
(781) 556-1026
[email protected]

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