Local media ad revenues to grow to $159 billion in 2018

0

BIA KelseyIn its newly released U.S. Local Media Forecast, BIA/Kelsey forecasts local media ad revenues to climb from $133.2 billion in 2013 to $158.6 billion in 2018, representing a compound annual growth rate (CAGR) of 3.6%. Digital media continues to increase its share of total local media revenues, growing from $31.7 billion (23%) in 2014 to $52.7 billion (33.2%) in 2018.


“While the U.S. economy is not expected to grow very quickly over the next few years, we estimate the overall local media market will grow faster than previously thought through 2018,” said Mark Fratrik, SVP and chief economist, BIA/Kelsey. “Based on positive trends in the overall local media marketplace, such as faster growth in online and mobile advertising, and the fact that national and local advertisers were slightly more aggressive in their advertising expenditures in 2013 than originally thought, we are optimistic on the entire industry’s ability to grow advertising revenues.

BIA-3454

From the report: “The U.S. economy in 2013 continued to experience a relatively slow growth for a recovery. There have been several months of slightly stronger unemployment. Overall GDP growth was lackluster in the fourth quarter. The U.S. stock market has shown strong gains indicating some positive outlook towards the future, especially with respect to local media companies. As a result, national and local advertisers were slightly more forthcoming with their advertising expenditures in 2013 than our initial forecast anticipated. We now believe the local ad market totaled $133.2 billion in 2013, compared with our initial estimate of $132.7 billion. Based on changes in the overall local media marketplace, we estimate the overall local media market will grow faster than previously thought through 2018 (at a 3.6% compound annual growth rate). By 2018 the total will be $158.6 billion, strengthened by political and Olympic advertising. Total local media advertising revenue growth will fail to keep pace with growth of the overall economy throughout our projection period. Advertising as a percentage of GDP will reach a new low of 0.75%. Growth in online/digital advertising revenues will remain strong, with a  2013-2018 CAGR of 13.6%. That compares with a 2013-2018 CAGR of 0.1% for traditional advertising revenues. By 2018 local online/interactive/digital advertising revenues will be $52.7 billion, 33.2% of the total local media advertising revenues.”

BIA/Kelsey expects revenue from traditional media, in aggregate, to slightly increase from $105.3 billion in 2013 to $105.9 billion in 2018 (CAGR: 0.1%). As expected, the political ad spend cycle contributes to a drop in revenues in odd-numbered years. Despite the year-over-year political advertising seesaw effect, traditional media revenues remain remarkably steady throughout the forecast.

BIA-4321

According to the forecast, radio advertising accounted for 11.1% of the total $133.2 billion spent in 2013 (direct mail, newspapers, and TV led the category). The primary sources of revenue for local radio in 2013 were Automobile Dealers ($1.438 billion), wireless telecommunications ($650.8 million), and full-service restaurants ($647.8 million). Based on changes in the overall local media marketplace, BIA/Kelsey estimates that the overall local media market will grow faster than previously thought through 2018. By 2018 the total will be $158.6 billion, of which $16.7 billion – or 10.5% – will go to local radio.

Television advertising accounted for 14.3% of the total $133.2 billion spent in 2013 (direct mail and newspapers led the category). The primary sources of revenue for local television in 2013 were automotive dealers ($3.5 billion), wireless telecommunications ($772 million), hospitals ($652.7 million), and full-service restaurants ($558.3 million). Based on changes in the overall local media marketplace, BIA/Kelsey estimates that the overall local media market will grow faster than previously thought through 2018. By 2018, the total will be $158.6 billion, of which $23.3 billion – or 14.7% – will go to local television, strengthened by political and Olympic advertising.

 

 

 


SHARE
Previous articleTM Studios unveils “The Production Artist”
Next articleEdison releases Infinite Dial Urban P1 study
Carl has been with RBR-TVBR since 1997 and is currently Managing Director/Senior Editor. Residing in Northern Virginia, he covers the business of broadcasting, advertising, programming, new media and engineering. He’s also done a great deal of interviews for the company and handles our ever-growing stable of bylined columnists.