U.S. spending for online local advertising will grow 26 percent to $3.2 billion this year and to $5.3 billion by 2010, according to a report released Wednesday by JupiterResearch, writes Information Week (via MediaBuyerPlanner). Online classifieds will drive the growth. Classifieds now account for about 70 percent of spending on local advertising online - and outside of classifieds, local ad spending online remains immature, said David Card, VP and senior analyst at JupiterResearch.

For now, online publishers and networks are better off serving national advertisers who are seeking local audiences, than serving local businesses, according to Card.

Local spending drove only 5 percent of online display advertising in 2004, and 16 percent of paid search listings. "Local service-based companies will lead the second wave of online local spending, but only if they are offered ad models that make sense for them," said senior analyst Gary Stein.