Kelsey Group Predicts Massive Growth in Online Verticals

The Kelsey Group forecasts that by 2012, spending on online classifieds in the U.S. are set to rise from $3.9 billion to $9.1 billion, while online verticals, including home services, home and garden, health care, legal and auto repair, will grow from $100 million to $5.6 billion in the next four years.

I talked with Peter Krasilovsky, a program director at Kelsey Group, about these numbers. Based on a trend analysis of rates of growth reported by the Internet Advertising Bureau, Krasilovsky noted that many local companies, which make up a great majority of the 12 million companies that advertise in the U.S., haven’t invested much in online advertising, but that could change with the increasing ubiquity of online vertical portals.

Places like Avoo (for lawyers), SpaBoom (for resorts and spas), and Xoova (for medical professionals), aimed at providing highly targeted local answers to users (and highly directed consumers to advertisers), could be ideal places for leery locals to make the jump into online advertising. According to the National Telecommunications and Information Administration, Internet usage is at more than 70 percent within the US, and a half of those users users with broadband; the print Yellow Pages are looking increasingly anemic.

Which isn’t helped by the Association of National Advertisers releasing an open letter to the Yellow Pages industry, demanding increased accountability in tracking circulation numbers. Frustrated with the Yellow Pages industry dragging its feet, ANA blogger Bill Duggan notes:

The current environment provides a tremendous opportunity for Yellow Pages. Marketing accountability and ROI are senior management imperatives — all marketing and advertising expenditures require justification. Yellow Pages already provides a unique level of accountability as marketers can track the calls resulting from their ads. However, without the fundamental metrics of syndicated audience measurement research and circulation auditing, the Yellow Pages medium simply won’t maximize its potential.