Modest ad local growth seen through 2017


ChartThe good news is that the local advertising pie is expected to grow, according to the latest report from BIA/Kelsey, even if not quite as fast as some might wish. The bad news is that all of the effective growth will be headed to digital and mobile while traditional media struggles to hold par.

Local revenue is pegged at $132.5B in 2012, and is projected to grow to $148.8B by 2017.

The lion’s share of that goes to traditional both times, but traditional will not like the trend – traditional media’s take in 2012 is said to be $109.4B, or 82.6% of the pie, compared to new media’s $23B/17.4%. But by 2017, BIA/Kelsey is projecting traditional’s local take will drop to $107.6B, while online and mobile grow to $41.1B, with a new breakdown of 72.4% to 27.6%.

“Local media has become a key channel, not only for local small businesses, but for regional businesses, national franchises and national brands targeting locally,” said Mark Fratrik, vice president and chief economist, BIA/Kelsey. “This is clearly seen in our tracking of market shifts in mobile, social, search, promotions, coupons and deals, native ads and sales transformation.”

Another percentage that is expected to diminish over the time period is the weight of local advertisers within the total spend, compared to that sent into local markets by nation advertisers. In 2012, local advertisers account for $90B of the total, just about 68%. By 2017, local spending will increase to $97.87B, but will comprise only 65.7% of the total.

RBR-TVBR observation: Here’s the good news about the bad news: There is nothing stopping traditional media outlets from operating an effective online and mobile operation, and the radio and/or television properties at the disposal of any broadcaster are an excellent place to help drive new digital business ventures.

If BIA/Kelsey is right and the money is moving to digital, our advice is to be there and make sure you get your fair share of it.