US local online advertising spending has a long way to go. The dollar gap between local online and local total media ad spending is huge, with $97 billion still going to offline media such as yellow pages and print newspapers. A mere 2.9% of all local ad spending will go online in 2007, or just $2.9 billion.

But the pressure to pony up local dollars is building, according to eMarketer's report "Local Online Advertising: Measuring the Market." As more consumers let their fingers do the walking across a keyboard instead of a phone directory to locate nearby businesses, the millions of US small and midsize companies will be compelled to follow them.

"As audiences continue migrating to the Web and away from traditional local media such as newspapers and radio, it's only a matter of time before online local ad spend catches up with today's reality," says David Hallerman, senior analyst and author of the report.

As a result, through 2011, spending for local online advertising will grow at a faster rate than either national advertising or total online advertising, eMarketer says. And this growth will attract hotter competition from portals, search engines, newspapers, TV stations and local directory listings.

Local and national businesses advertising in local markets will spend $2.9 billion in 2007, with that number rising to $7.8 billion in 2011, according to eMarketer.