A new report by Borrell Associates on online video advertising finds that newspapers selling video advertising are making more money than local TV stations.

In 2006, says the "2007 Local Online Video Advertising" study, newspaper-run websites received approximately $81 million in "locally spent streaming-video advertising, while local TV broadcasters captured about $32 million, suggesting that print media are "using the Internet as a crossover platform to tap traditional TV advertisers."

While nearly all local broadcast TV websites now feature classified ads, says the study, almost half of all newspaper sites offer video, and so do cable, radio, and yellow pages directories.

This trend is part of a larger change in local Web advertising away from banner ads and paid listings.

Borrell predicts that the competition between newspapers and TV stations will intensify as both develop Web-based video products, with the prime targets being autos, health, employment, and yes, real estate.

Welcome to the age of the Internet infomercial or Webmercials.

Local video advertising is still a relatively small market, but consider how it is projected to grow in only one year -- from $161 million in 2006 to $371 million in 2007. While that's still only five percent of the money spent on all local online advertising, and less than half a percent of all local advertising, the popularity of the medium is growing, along with the applications. Borrell predicts that in five years, local online video advertising will surpass $5 billion, or 33 percent of all local online advertising.

"Where will that money go? Not to the purveyors of the traditional "word from our sponsor" commercials," says Peter Conti, senior vice president Borrell Associates Inc. "but to those who can offer long-form video information that their website visitors actually choose to see."

How does real estate fit in?

"One of the areas we see the most potential for a business category to be ahead of the curve is the real estate industry," says Conti. "They are already used to getting their face out to the public and advertsing on websites particularly newspaper sites, and they use virtual tours, so this is a natural progression for them. The top Realtors realize the importance of this type of advertising. They're right for this format."

Conti says that local online video Webmercials are the perfect look-at-me medium. "This is going to become a big area with agents, and big teams, a way to showcase themselve they have not been able to do before," he envisions. "If they can capture attention on a preroll (introduction) before a home tour about their knowledge -- get to know me, click here -- it's an opportunity for a lot less money than broadcast TV."

In addition, agents are turning to the Web as a means of delivering more value to the homeseller, suggests Conti. "Real estate is an $11 billion ad category in flux, and that's for all advertising," he says, "and the only place that will see a positive gain is online."

Unlike TV ads, which are purchased by stations, shows and times, online Webmercials are targeted to an interested audience. Anyone who wants to see content such as listings, for example, will sit through a preroll by a company, broker or agent first, much like current news channels such as CNN and MSNBC. If you want to see the video, you see the sponsor's commercial first.

Where this will play out, says Conti, is on local media websites. "You can go to a targeted area looking for a particular type of home, and an agent that handles that area will pop up before you get into the search," says Conti.

Welcome to the new age of Internet advertising.

Editor's note: to purchase the full report, go to borrellassociates.com .