A new year, a brand new season of forecasts for market researchers. Aside from the widely-publicized report of The Kelsey Group, Borrell Associates releases another bold 2008 prediction: local online ad spending will double by the whopping 48% in 2008.
According to Newsfactor.com, the demand for paid search and video advertising will drive the demand, according to a new study.

After a decade of testing the Web, local advertisers are making significant adjustments to their marketing dials, turning up the volume on online advertising, says local media research firm Borrell Associates. The firm predicted local search advertising will more than double next year to $5 billion, while locally placed online video will triple to almost $1.3 billion.

While Borrell’s numbers don’t line up with the predictions of other research groups (who generally predict slower growth in the online local ad segment), nearly every report indicates the same thing: local ad sales are on the rise on the Internet.

The Borrell report reveals that the growth is mostly being experienced on pure-play Internet sites, while local media outlets are losing market share. Further, the report predicts that “key advertising segments for 2008 will continue to be the Big 3 classified categories of automotive, recruitment, and real estate, with online political marketing holding promise for local sites as state and presidential campaigns heat up.”

Major online media companies have also realized the massive potential that exists in local advertising in recent years, wrote Josh Catone of Newsfactor.com. We noted this past summer that online classified ads have experienced some of the fastest growth of any online ad segment.

Yahoo!, for example, has begun to form a newspaper alliance that puts its HotJobs recruitment classifieds in local markets around the United States. Yahoo!’s alliance now reaches over 400 newspapers.

Meanwhile, much of Facebook’s advertising play is about hypertargeting based on location and other demographic data.