BIA/Kelsey’s U.S. Local Advertising Forecast 2016 reveals ‘power brew’ of mobile, social and video propelling online/digital to a 29.1% share of total local ad revenues next year.
CHANTILLY, Va. (Nov. 2, 2015) – In its newly released U.S. Local Advertising Forecast 2016, BIA/Kelsey projects total local advertising revenues in the U.S. to reach $146.6 billion in 2016, up from $141.3 billion this year, representing a growth rate of 3.75 percent. Online/digital revenues will grow to $42.6 billion in 2016, 29.1 percent of total local media revenues, up from $38 billion in 2015. BIA/Kelsey defines local advertising as all advertising platforms that provide access to local audiences for national, regional and local marketers.
“For 2016, we expect total local ad revenues to nudge upward, resulting from a slightly stronger U.S. economy and a substantial amount of political advertising,” said Mark Fratrik, chief economist, BIA/Kelsey. “We also adjusted our 2015 estimate for total local media spending up slightly due to stronger mobile and social advertising.”
The Power Brew: Mobile, Social, Video
Mobile, social and video—what BIA/Kelsey refers to as the “power brew” for local advertisers—are among the categories that are fueling growth in the local online/digital segment. Forecasts for several power brew categories include:
- Location-targeted mobile ad spending will grow from $8.4 billion in 2015 to $11.3 billion in 2016
- Social local media revenues will grow from $2.4 billion in 2015 to $3.3 billion in 2016
- Local search revenues will grow from $7.8 billion in 2015 to $8.2 billion in 2016
- Total local display revenues will grow from $4.4 billion in 2015 to $4.6 billion in 2016
- Local video display revenues will grow from $0.7 billion in 2015 to $0.9 billion in 2016
- Mobile video revenues will grow from $0.4 billion in 2015 to $0.7 billion in 2016
“Mobile is the primary force behind the continuing increase in digital advertising, largely driven by social advertising,” explained Fratrik. “Mobile spending is growing faster than expected, cutting into the growth of other online advertising. For example, online spending on ads viewed through desktops is still increasing, but overall only at single digit growth rates as more of the attention of consumers and advertisers alike shifts to mobile. Local video spending on all platforms—mobile, online, TV over-the-air, cable and out of home—will grow, along with local video’s slice of the local advertising pie.”
BIA/Kelsey will present highlights from the local online/digital segment of the forecast at its upcoming conference, BIA/Kelsey NEXT: The Future of Local Digital Media, which takes place Dec. 9-10, in Los Angeles. Visit http://www.biakelsey.com/NEXT for complete conference information, including the agenda, speakers and online registration.
About the BIA/Kelsey U.S. Local Advertising Forecast 2016
The BIA/Kelsey U.S. Local Advertising Forecast 2016 is a five-year forecast that delivers a national overview of total U.S. spending in local markets and individual media breakouts for direct mail, local video, local over-the-air television, local cable television, out-of-home/OOH video, newspaper, online, radio, mobile, directories, social and magazines.
BIA/Kelsey defines local advertising as all advertising platforms that provide access to local audiences for national, regional and local marketers.
Location-targeted mobile advertising is defined as mobile advertising that is targeted based on a user’s location, or including proximity-relevant content to trigger local offline conversions. It includes large national advertisers and SMBs. Location-specific ad copy or calls to action (e.g., call local store) will classify a given ad as location targeted. Revenue from advertising that appears on tablets is not included in BIA/Kelsey’s classification of mobile.
BIA/Kelsey advises companies in the local media space through consulting and valuation services, research and forecasts, Custom 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 http://www.biakelsey.com, on the company’s Local Media Watch blog, Twitter (http://twitter.com/BIAKelsey) and Facebook (http://www.facebook.com/biakelsey).
For more information contact: