BIA/Kelsey Forecasts U.S. Local Digital Ad Revenues to Nearly Double
to $42.5B by 2015 from $21.7B in 2010
The firm’s newly released U.S. Local Media Annual Forecast
indicates digital media will represent 23.6 percent of all local advertising
by 2015
CHANTILLY, Va. and BOSTON, Mass. (March 21, 2011) - Local advertisers
continue their steady migration to digital
media platforms, according to BIA/Kelsey’s U.S. Local Media Annual
Forecast (2010-2015).
BIA/Kelsey, adviser to companies
in the local media industry, expects online/interactive advertising
revenues to climb to $42.5 billion by 2015, almost double 2010’s
$21.7 billion, representing a compound annual growth rate (CAGR) of
14.4 percent. This growth coincides with anticipated improvement in
the U.S. economy and a continued rise in overall local advertising,
which the firm expects will reach $153.5 billion in 2015, up from $136.3
billion in 2010, representing a 2.1 percent CAGR.
As digital media — delivered to consumers through mobile, Internet
or other electronic methods — continues to gain traction with
local advertisers, BIA/Kelsey predicts it will represent 23.6 percent
of all local ad spending by 2015.
“As the business climate improves and advertisers step back
into the market, they are gravitating to digital options that perhaps
were not as mature before the recession began,” said Tom Buono,
chief executive officer, BIA/Kelsey. “Our analysis indicates
that as advertisers move to online, mobile and, particularly, the variants
of social media, we are fast approaching a tipping point where digital
media will soon become a dominant segment of the local advertising
marketplace.”
BIA/Kelsey reports among the key drivers of this year’s forecast
are:
The increased number of smartphones and tablets is already
playing a role in affecting revenue shares
earned by traditional media.
Continued
significant newspaper revenue erosion will
drive pay walls and other creative approaches
for rebuilding revenue base.
Intense political
advertising and uptick in national advertising
lifted television and other media revenues
in Q4 2010, increasing prospects for the forecast period.
The interactive/online
sector continues to advance and multiply
with new formats such as social and mobile.
“What we’re seeing in terms of media share shifts and
transformation is really unprecedented,” said Neal Polachek,
president, BIA/Kelsey. “As we look forward, the core issue challenging
advertisers is to figure out a media plan that leverages the transactional
nature of digital media with the scale and reach of traditional media.”
BIA/Kelsey’s U.S. Local Media Annual Forecast also notes that
social forms of digital media are increasingly becoming an important
component of online revenues. Consumer spending on deal-a-day offers,
which the firm expects will grow to $3.9 billion by 2015, illustrates
an expanding market that includes Facebook and Twitter.
Topline numbers from the forecast were presented to some 500 local
media industry executives this morning at BIA/Kelsey’s Interactive
Local Media East conference, which is being held today through
Wednesday at the Boston Marriott Copley Place.
BIA/Kelsey U.S. Local Media Annual Forecast — The Big Picture
on ‘Local’
This year’s forecast provides a deeper
review and analysis into the expansion of online elements, including
interactive and social media. It presents a comprehensive and authoritative
view of the local media landscape, consisting of 12 key segments: newspapers,
direct mail, television, radio, print Yellow Pages, out of home (non-digital),
cable television, magazines, online/interactive, mobile, Internet Yellow
Pages, and other interactive revenues generated by traditional media
players.
BIA/Kelsey defines local advertising as local spending by small and
medium-sized businesses (SMBs) and national and regional advertisers
making local buys. The BIA/Kelsey U.S. Local Media Annual Forecast
(2010-2015) draws from proprietary data; company, industry and country
information in the public domain; and discussions with clients and
non-clients about the direction and pace of development in the local
media marketplace.
Building off the forecast research, BIA/Kelsey offers Media Ad
View Reports, market-specific custom reports that provide a comprehensive
picture of the state of local media advertising and a five-year projection
across 12 media categories and the top 12 advertising categories in
markets nationwide.
About BIA/Kelsey
BIA/Kelsey advises companies in the local media space through consulting
and valuation services, research, Continuous
Advisory Services and conferences. Since 1983 BIA/Kelsey has been a
resource to the media, mobile advertising, telecommunications, Yellow
Pages and electronic directory markets, as well as to government agencies,
law firms and investment companies looking to understand trends and
revenue drivers. BIA/Kelsey’s annual conferences draw executives
from across industries seeking expert guidance on how companies are
finding innovative ways to grow. Additional information is available
at www.biakelsey.com,
on the company’s Local
Media Watch blog and on Twitter at http://twitter.com/BIAKelsey.
