BIA/Kelsey this morning released its mid-year 2017 update to its U.S. Local Advertising Forecast. How’s local TV faring? It’s No. 2. What about radio? There’s some not-so-great news for the C-Suite, but it mirrors other prognostications we’ve seen as of late.
In the mid-year update to its U.S. Local Advertising Forecast 2017, BIA/Kelsey forecasts the overall local media marketplace to experience consistent growth from 2016-2021, reaching approximately $174 billion by 2021 with a CAGR (compound annual growth rate) of 3.8%.
This growth will be driven by double-digit increases in mobile and social advertising and local online and mobile video—all slated to experience at least a 17% increase by 2021.
For 2017, however, BIA/Kelsey has slightly decreased their advertising experience to $147.9 billion. An overall weaker than expected economy in the beginning of 2017 has led to softness in advertising revenues, BIA/Kelsey explains.
Even so, BIA/Kelsey predicts that future growth in online/digital ad revenues will be higher than originally predicted. This means there is now an anticipated 2016-2021 CAGR of 11.9%. Over the same period, traditional ad revenue will see a slight decrease in the five-year period, with statistically flat CAGR of -0.6%.
“We are on the precipice of different advertising channels taking lead positions in the local advertising marketplace,” said Dr. Mark Fratrik, Chief Economist of BIA/Kelsey. “Although national and local business still utilize a mix of digital and traditional advertising platforms, the opportunities afforded by mobile, social and video advertising are incredibly valuable due to their measurability, adoption by consumers and enhancements by technologies such as beacons and data attribution that blend extraordinary well with today’s mobile consumer.”
According to the forecast, the top five media (revenues and share of market) contributing to the local media pie in 2017 are as follows:
- Direct mail – $37.1 billion (25% share)
- Local TV – $20.9 billion (14% share)
- Online/Interactive – $18.6 billion (11% share)
- Newspapers – $16 billion (11% share)
At No. 6 is Local Radio, with $15.6 billion.
While mobile has replaced radio in the top five media this year, the dominant player continues to be direct mail, Fratrik notes.
The latest data comes from a five-year forecast released annually that delivers a national overview of total U.S. spending in local markets and includes individual forecast breakouts for top local media forms, including OOH display and video, directories, and social media, in addition to local magazines.