L.A.’s Outsized Role In Local Golden Advertising


LOS ANGELES — Local advertising in the sprawling Los Angeles DMA, which includes the Inland Empire, High Desert, and Orange and Ventura Counties, will top $9.1 billion in 2018, while statewide spending is expected to exceed $18.8 billion across California’s 12 media markets.

Those are the key findings from BIA Advisory Services’ latest local advertising forecast for the Golden State, released ahead of a July 12 presentation at Hotel Indigo in now-trendy downtown L.A.

But, where do radio and TV fit in a portrait that now features digital as prominently as the Infanta Margarita Teresa in Diego Velasquez’s Las Meninas?

“Our California ad forecast shows that key advertisers are getting more comfortable with a cross-platform advertising approach that includes significant mobile and digital along with their traditional advertising,” notes Dr. Mark Fratrik, BIA Advisory Services’ Chief Economist.

Meanwhile, check out the outsized role the L.A. market plays for the entire state: The Los Angeles DMA represents 48% of California’s local ad spending.

What brands and businesses are most actively using local media in California to reach consumers? The data looks a tad different from that seen each week in Media Monitors Spot Ten reports for radio and both broadcast and cable TV.

According to BIA, key vertical markets of retail, general services (including various professional services ranging from legal services to landscaping) and financial/insurance across California will cumulatively spend nearly $8 billion divided between traditional and digital media, with mobile advertising experiencing the highest growth of any media.

BIA’s forecasting also shows that financial and insurance industry advertisers will increase its spend by “at least 18%” from 2018 through 2022.

While total local ad dollars appear healthy, AM and FM radio lag — a sign that even the most important radio market in the U.S. has challenges.

As shown below, direct mail dominates, followed by broadcast TV. Then comes mobile, and online. Radio lags far behind, some $330 million below the $2 billion mark.

Ad Spend in Top Media in California
Of the 16 advertising platforms tracked in the BIA’s forecast, the top five choices for expenditures in California for 2018 include:

  • Direct mail ($4.81 billion)
  • TV Over-the-Air ($2.66 billion)
  • Mobile ($2.38 billion)
  • Online ($2.21 billion)
  • Radio Over-the-Air ($1.66 billion)


Furthermore, growth over the next five years for the key financial/insurance category in California “is projected to primarily grow” through mobile (up $290 million), online (up $68 million) and by e-mail ($29 million).

How does Southern California compare to the Bay Area and the state capital of Sacramento?

“Spend by the top three verticals varies significantly,” according to BIA.

For the Retail category, L.A. checks in with $1.74 billion; while the San Francisco-San Jose-Oakland DMA collects $869 million. Sacramento sees $350 million in spending as it is a much smaller market, comparatively.

For general services and financial/insurance, the same pattern was seen: L.A. is a $1 billion market, with San Francisco failing to top the $500 million mark and Sacramento just shy of $192 million.

RBR+TVBR OBSERVATION: In the coming days we will be offering a Media Information Bureau column on the true presence of Radio in three very different markets we’ve traveled to in the last two weeks: Honolulu, Maui and Los Angeles. Does Radio play a significant role in each of these communities? No. Maui’s radio stations are present, but with limits. In Honolulu, radio stations may as well be nonexistent — like the Star Advertiser. In L.A., we were very pleased to have a rental car with HD radio capability. As a result, we were disappointed to see how Entercom under-utilizes its HD multicast signals. Further, we saw no outdoor advertising or anything in the market that suggested listeners tune to any station; we don’t include the big KLOS sign on the 405 Freeway near Inglewood Avenue in Redondo Beach. So, how do iHeartMedia stations stay top of mind? How will David Field get the ad dollars he thinks his mediocre properties in the Southland command? Social media promotion is a cheap “talk amongst yourselves” approach that is akin to P1 promotional flyers sent via U.S. Mail. Cumulus Media wants to emerge from Chapter 11 bankruptcy protection as a truly healthy operation? Then tell people why they should consider KLOS as an audio entertainment option. C’mon, L.A.: If you’re the No. 1 revenue market in the U.S. (Is still the case, or is it New York?) and you can’t spend a dime on a billboard because Netflix and Amazon bought them all, just give up already. All of my GenX buddies across the Southland don’t consume your product as it is. Soon, you’ll lose their parents. As you never bothered to attract their kids, you’ll be left as a utility in a world of choice. Go get some billboards. Put some TV ads on KABC-7. Strut your stuff and tell the Southland why your stations still matter. And, stop relying on social media to do this — it only reinforces the fact that your advertisers prefer that media to yours.