Station Websites to Make $1.3 Billion in 2009

Local TV seeing big growth, but must adapt to gain share

TV stations' Websites reached the $1 billion mark in revenue for the first time last year, a 36% gain over 2007, and are on course to do $1.3 in business this year. Despite the dismal economy, that represents a 26% boost over 2008.

These findings were shared by Borrell Associates and the Television Bureau of Advertising in Manhattan this morning. Borrell analyzed Web revenues from 718 TV stations to come up with its nationwide estimate. Borrell CEO Gordon Borrell envisions big things for the stations with a savvy digital strategy. "I think this is going to be a breakout year for a lot of stations that get it," he said.

Borrell said there's ample room for continued growth. The local advertising pie across all media was $12.6 billion in 2008, with local television's $1.03 billion haul a fraction of that. Broadcast TV's 8.3% of the local online ad share was well behind the newspaper category's 27.7% share and pure-play Internet's 47.2%.

But Borrell said many stations are taking the fight to the ailing newspaper category online. In 22 of the 80 markets surveyed, he said a station site drew more traffic than the big newspaper site, including KOAT Albuquerque, WIS Columbia and WBNS Columbus. What will help stations in the fight against the Internet giants, said Borrell, are their local focus--both in terms of content and marketing.

Stations in the larger markets, many scrapping their call letters in rebranding their Websites, saw the biggest gains. The average station in markets 1-20 pulled in $1.37 million in Web revenue-a 65% boost over 2007. Stations in markets 21-50 actually saw a 3% drop in Web revenue, while markets 50-plus saw an incline of about 33%.

Borrell said broadcasters are boosting business-and taking the fight to newspapers-by offering a wide range of vertical sites, focused on categories such as auto, real estate and employment. "[Stations] have begun using the Web to launch new products that compete directly with newspapers, Yellow Pages and with each other," said Borrell. "This was just theory or anecdotal until last year. Now it's happening, and the launch of these new brands seems to be propelling those stations further ahead in revenues."

Looking beyond 2009, Borrell forecasted $1.59 billion in station Web revenue in 2010, and $1.83 billion in 2011. The figure was just $447 million as recently as 2006.