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Local.com's CEO Discusses Q4 2011 Results - Earnings Call Transcript

Firstly secular trends. More consumers are spending more time online and quite simply, advertising in the US is going digital in order to reach those consumers. Between 2010 and 2015 old media advertising declined at the rate of 1% or about $1 billion per year but in that same time frame, digital media will grow from 15 to 25% of all local advertising or from 20 to $38 billion generating a compound annual revenue growth of nearly 14%. This year is the first time in history that digital ad spend is forecast to exceed print ad spend in the US. So you can see that digital media companies benefit from these secular ad trends. And Local Corporation's advantage goes deeper than this to also capitalize on the revolution occurring within digital media itself.

Because consumers spend about 80% of their household income within 20 miles of their homes, advertisers want to target those consumers locally. And this need is shifting digital ad spend towards local digital in key segments. For example, local search advertising will grow from 29% of all search to 35% of all search between 2010 and 2015 or $5 billion to $9 billion in spend representing a compound annual growth rate of nearly 12%. Over that same time, local display advertising will grow from 20% to 30% of all display or from $2 billion to $5 billion representing a compound annual revenue growth rate of nearly 20%. Local rich media, a segment within local display is forecast to grow even faster at 50% per year through 2015 and finally daily deals and innovative local ad segments that didn't even exist a few years ago is projected to grow about 37% per year in that time frame increasing from $900 million in 2010 to $4.2 billion in 2015.

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