Local advertising is the great untapped market for the Web, and unlocking it is what is driving much of mobile and geo-targeted advertising these days. Think Google Places, Yelp, Craigslist, Foursquare, Patch, Citygrid, Gowalla, Yodle, Yext, and so on. How big is the local advertising pie and how much can Internet companies capture?

According to a brand spanking new forecast from market research firm BIA/Kelsey, online local advertising in the U.S. will reach nearly $20 billion this year, which is up a very healthy 26 percent from last year. (That includes the online efforts of offline advertisers. If you look at online-only players, their local ad revenues are estimated to grow 30 percent this year). Total online advertising is only expected to grow 2 percent to $133 billion. Online will make up 15 percent of the total local advertising pie, up from 12 percent last year.

BIA/Kelsey forecasts that online local advertising will grow to $35 billion by 2014, at which point it will make up 24 percent of a $145 billion market. No wonder everybody on the Web is scrambling to own a piece of local advertising.

Local TV advertising should also do well this year because of the boost from the elections. It is expected to grow 13 percent this year.