Spending on local online advertising is expected to rise faster than national spending, said a report from Borrell Associates.

The firm forecasts local interactive advertising spending will rise 31.6 percent in 2007. That would be a far greater increase than the 20 percent that national advertising is expected to grow. Most of the percentage will likely go toward local newspapers, which funnel 35.9 percent of local spending.

The number of local, online-only advertising sales staff grew 26 percent in 2006. This percentage is slowly moving beyond traditional advertisers. Other local businesses that may not have considered advertising before are being pursued in an attempt to generate new money as opposed to dollars that might be shifted online from print budgets.

Major players like Yahoo, Google and Monster are expected to take a larger slice of that online spending based on their own ventures, as well as partnerships they're forging with publishers of local papers. Those major companies currently account for 33.2 percent of local online ad spending.