CHANTILLY, VA—BIA Advisory Services—a provider of data-centered market research, analysis, strategic consulting and valuation services for the local media industry—projects that local TV station revenue will reach $27.7 billion, up from $26.2 billion in 2017.  

Anticipating higher ad revenues driven by political ads, BIA Advisory also projects $18.2 billion for over-the-air ad revenue, up 5.8 percent—and $1.1 billion for digital revenue, up 6.3 percent—compared to 2017. And retransmission consent agreements between local TV stations and cable/satellite companies will contribute another $8.4 billion to the industry’s total revenue this year.

“This year will be particularly interesting to watch in terms of political and digital. Local television is at a juncture where strategic decisions will be key to their success,” said Mark Fratrik, senior vice president and chief economist at BIA Advisory Services. “We anticipate political advertising will generate significant ad revenue for local television this year, in particular for over-the-air revenue. Of all media, television still dominates in political years, even as campaigns integrate more digital advertising into their overall strategy.”

[Read: Global Consumer Spending On Entertainment Media To Reach $439B By 2021]

BIA Advisory claims that the local TV industry is offsetting flat over-the-air revenues by expanding its multiplatform advertising to deliver content more effectively in today’s multi-touch point content ecosystem. The firm estimates that location-targeted mobile ad spend will be $22.1 billion in 2018, which includes $3.1 billion of additional mobile advertising sold by traditional media players, including TV broadcasters and other traditional media.

“Mobile advertising is a smart play for television because it offers a unique opportunity to leverage existing assets, such as news and weather, through sponsored mobile websites and applications,” Fratrik adds. “These types of efforts are important as over-the-top—or OTT—services continue to attract viewers.”

BIA Advisory published these findings, along with a comprehensive profile of all 210 television markets plus Puerto Rico, in the first-quarter edition of its “Investing In Television Market Report,” as well as its software database, Media Access Pro, an analytical data service that delivers comprehensive information on the radio, TV and newspaper industries. BIA also delivers nationwide and local market forecasts in BIA ADVantage, a local market intelligence dashboard. 

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CHANTILLY, VA.—As BIA/Kelsey looks down the road of local video advertising, it is seeing a healthy growth as a result of progress in Advanced TV and an industry commitment to improving interactivity and the viewer experience. The “Advanced TV: Executive Views on Industry Progress & New Directions” report forecasts that the local video advertising market will grow to $32.6 billion in 2018 and will reach $37.1 billion by 2022.

BIA/Kelsey’s report is defining “Advanced TV” as linear TV platforms; this includes automated TV, programmatic TV, addressable TV, OTT, Smart TV, Connected TV and ATSC 3.0.

The report indicates that growth in the market for local video impressions and related ad spending comes from the mobile and digital categories. Per the report, marketers plan to increase their spending in these categories because of the ability to develop and measure data-infused video campaigns that can target video audiences on an individual basis using segmenting attributes. Local TV is looking to advanced TV solutions to provide the capabilities to match mobile and digital.

“Local TV must become more competitive to maintain growth in a market where local ad spending is migrating to digital ad platforms, driven by the secular trend of increased people-based marketing,” said Rick Ducey, managing director at BIA/Kelsey and report co-author. “Advanced TV could be a viable solution because it brings data-infused audience targeting beyond just gender and age and delivers analytics between TV ad exposure and subsequent consumer behaviors. Eventual success will come down to continued efforts in developing and transitioning to new automated workflows.”

The full report, which includes interviews with industry executives, is available here.

CHANTILLY, VA.—Local TV broadcasters take heed; now is the time to innovate in order to compete effectively with new local digital platforms for advertising dollars.

That’s one of the takeaways from a new BIA/Kelsey report, “Advanced TV: Industry Views on Progress & New Directions,” looking at advanced television and the thoughts of top executives from various media enterprises.

A July BIA/Kelsey forecast indicates the spend for local linear television and digital video platforms will grow from $31.9 billion in 2017 to $38.3 billion by 2021. Linear TV, which includes broadcasters and MVPDs, will account for 82 percent of spending on local video and 54 percent of the growth.

Digital platforms, including local mobile video, local online video and out-of-home video spending, will account for the rest. However, broadcasters have the ability to challenge the flow of these ad dollars into local digital platforms, particularly if they choose to innovate.

“Agencies and marketers and their data scientists and planner[s] are becoming more sophisticated in their matching and uses of disparate database[s] to develop strategic profiles of their consumers,” the report says.

They have built “data-driven strategic consumer profiles,” and buyers want to bring that into the media domain, it says. So far, digital has a leg up on linear TV in this regard.

However, “interesting innovation” is happening in cross-platform solutions, local data management platforms, audience targeting and greater campaign accountability. “These innovations may bend current trend lines in the media mix if linear video can become competitive,” the report says.

The advanced television report presents the insights of several media executives, including an executive from Sinclair Broadcast Group, on these trends.

 “We need to become easier to buy,” the report quotes the Sinclair executive as saying. “Local TV systems and buying protocols were designed for simple local sales around single stations—the ecosystem has evolved far beyond the traditional spot based, single station sales paradigm, as consolidation has spawned larger broadcast groups.”

The next-generation TV standard will add even greater complexity and present new opportunities requiring its own automation, the Sinclair executive is quoted as saying.

BIA/Kelsey predicts “a relatively volatile future” for the local video market as traditional media players, new pure plays, audiences and advertisers “settle into a panoply of new options and start creating new habit.”

To learn more about the report, visit the BIA/Kelsey website.

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CHANTILLY, VA.—Local ad revenue is predicted to reach record highs by 2021 in large part due to the growth of local online and mobile video, as well as mobile and social advertising, according to the midyear update of BIA/Kelsey’s “U.S. Local Advertising Forecast 2017.” With an expected 17 percent growth for online and mobile sources, BIA/Kelsey believes that the local ad revenue could reach $174 billion by 2021.

All of this despite the updated report decreasing its advertising estimate for 2017. The report adjusts this year’s potential revenue to $147.9 billion, citing an overall weaker economy in the beginning of 2017 that has led to softness in advertising revenues. However, forecasts for online/digital ad revenues are higher than predicted, with a 2016-2021 Compound Annual Growth Rate of 11.6 percent. Over that same period, traditional ad revenue sources are expected to see a slight decline of 0.6 percent CAGR.

“Although national and local businesses 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 extraordinarily well with today’s mobile consumer,” said Mark Fratrik, chief economist for BIA/Kelsey.

Mobile has already made strides in replacing more traditional ad revenues. The report forecasts the top four media sources contributing to the local media pie for 2017, rounded out by direct mail at $37.1 billion; local TV at $20.9 billion; online/interactive at $18.6 billion; and newspapers at $16 billion. Mobile, at $16 billion, took over the number five spot, edging out local radio, which dropped to number six with a contribution of $15.6 billion.

The “U.S. Local Advertising Forecast” is a five-year forecast that delivers a national overview of total U.S. spending in local markets. To full report is available through BIA/Kelsey.

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CHANTILLY, VA.—While increased election advertising and double-digit growth through digital media offerings were significant contributors to the total industry revenue for local television stations in 2016, BIA/Kelsey’s report estimated that nearly one-fourth of the total revenue came from retransmission consent agreements between local TV stations and cable/satellite companies. BIA/Kelsey found that stations received $6.8 billion from retransmission agreements.

“The dependence on retransmission fees has become incredibly important to local stations and many publicly traded ownership groups because it amounts to nearly one-third of their revenue,” said Mark Fratrik, senior vice president and chief economist at BIA/Kelsey. “The fees provide a sound financial basis for the stations and have also become the foundation for many of the larger stations. Our analysis also uncovered that even mid-size and smaller market stations are increasingly relying on the income provided by these fees.”

As a result of the boost in retransmission fees has caused BIA/Kelsey to include retransmission consent estimates on local television in its “Media Access Pro” and “Investing in Television Market” reports. Because retransmission agreements are not made public, BIA/Kelsey developed a modeling formula that uses public information and industry knowledge to provide an examination into revenue streams for stations. In the reports, BIA/Kelsey predicts that retransmission fees will continue to rise over the next five years.

Other findings in BIA/Kelsey’s report show that television is experiencing growth in over-the-air revenues, in large part based on the 2016 elections for president, as well as statewide and local races. Digital revenues also saw an uptick, generating $1.006 billion, a 10.4 percent increase over 2015. BIA/Kelsey forecasts a 8.8 percent increase for digital revenues in 2017.

CHANTILLY, VA.—BIA/Kelsey is bullish on ATSC 3.0. The TV business researchers today said that after an “in-depth review of the commercial television broadcasting business,” they concluded that “investment large and medium market stations are considering making in the ATSC 3.0 standard would be recouped within three years. “

“ATSC 3.0 will change the business of broadcasting into a next generation wireless communications business,” said Mark Fratrik, chief economist and SVP, BIA/Kelsey. “This new technology will give Broadcasters the ability to pursue multiple new business models which will significantly diversify their current revenue mix.”

Also see our ATSC 3.0 awareness survey as well as our ATSC 3.0 silo, your one-stop shop for ATSC 3.0 reporting and analysis going back to 2o11, with contributions from ATSC President Mark Richer, TV Technology correspondent Bob Kovacs, TV Technology contributor and pre-eminent RF expert Doug Lung, ATSC 3.0 chairman and Triveni Chief Science Officer Richard Chernock, ATSC Vice President of Standards Jerry Whitaker, Cox Media Vice President of Technical Operations Dave Siegler, TV Technology contributor and Iowa Public TV Director of Engineering Bill Hayes, TV Technology Editor-in-Chief Tom Butts, TV Technology Web and NewsBytes Editor Michael Balderston, Nautel Product Manager and Ennes trustee Fred Baumgartner, Director of Broadcast Engineering and Operations at Walter Cronkite School of Journalism and Mass Communication & KAET-TV in Phoenix Ian McSpadden, TV Technology Oracle of Engineering James E. O’Neal, TV Technology contributor Gary Arlen, and others. At the core of broadcasters’ ATSC 3.0 expectations is the ability to offer a new internet-protocol platform to better satisfy the changing needs of consumers and advertisers. The paper examines the business objectives for the television broadcasting industry and its members around the ATSC 3.0 migration, which include delivery of a higher visual and aural quality, more programming options, and ongoing innovation to accommodate expected and unexpected abrupt and hard-to-predict changing viewing patterns.

BIA/Kelsey also said ATSC 3.0 would help raise advertising revenue through increased viewership, better ad targeting, dramatically expanded and more accurate viewership tracking, and a capability to better integrate multiplatform campaigns, as well as growing non-advertising revenue through the development of new IP-based broadcasting and non-broadcasting business models.

The research, compiled in a new report, also covers concerns related to the ATSC 3.0 conversion, which include overall capital cost, providing uninterrupted service to their existing audience and determining the relevant time frame for transition.

“The biggest opportunities around the implementation of ATSC 3.0 are that it will give broadcasters a new opportunity to grow and address their major concerns like reversing recent local television station viewing trends,” Fratrik said “In our report, we present the business model for implementing ATSC 3.0 based upon our assumptions of the speed of introduction and acceptance by consumers, advertisers and other players in the media ecosystem and overall it’s quite positive for the vast majority of local television stations.”

The report, “The Business Case for ATSC 3.0,” examines ATSC from a business perspective by exploring the advantages this new standard will bring to the industry, in particular as it relates to ad revenue, television viewership and managing digital competition.

Here’s what the BIA/Kelsey folks said today from CHANTILLY, VA.—A new BIA/Kelsey Industry Watch report explores one of the fastest growing areas of location-targeted media: mobile. According to BIA/Kelsey estimates, annual U.S. mobile ad spending will grow from $33 billion in 2016 to $72 billion by 2021, a 17 percent compound annual growth rate. The location-targeted portion of that overall mobile ad spend is projected to grow from $12.4 billion in 2016 to $32.4 billion in 2021. This growth translates to 38 percent of overall mobile ad revenues today, growing to 45 percent by 2021.

One of the biggest mobile success factors for local mobile is native thinking, which involves building content, apps and ads that fit the device’s unique form factor, rather than porting formats from legacy media. The smartphone’s location-tracking abilities and portability, combined with users’ transitory behavior, make location-targeted content a natural fit.

“The smartphone revolution turns ten this year, and we’ve come a long way,” said Mike Boland, chief analyst of BIA/Kelsey and author of the report, “Getting to $72 Billion: BIA/Kelsey’s Mobile Ad Revenue Forecast.”
“But many are far behind, still operating with a desktop mindset. They’ll be left behind the next era of mobile, defined by native-social, voice interfaces and multimedia, not banner ads and traditional search,” he said.

In addition to segmenting mobile ad spend by its locality, the report also reveals BIA/Kelsey’s estimates for each mobile ad format including search, traditional display, messaging, video and native-social. Search has long maintained a top position but is slowly losing share to emerging formats like native-social.

Native-social ads are expected to derive $10.2 billion in 2016 and grow to $24.2 billion in 2021. This growth stems from the format’s advantages, high performance and resulting demand. For example, mobile screens lack real estate for traditional top and side banner ads that ruled the desktop web. A vertically scrolling feed (a la news feed) conversely holds greater capacity for ad inventory.

The mobile forecast covered in the report mirrors BIA/Kelsey’s cross-media U.S. Local Advertising Forecast for 2017 that covers 12 media. The forecast defines location-targeted ads as those that are targeted based on a user’s location or include proximity-relevant content to trigger local offline conversions.

CHANTILLY, VA.—Local television stations’ over-the-air ad revenue is expected to get a boost in 2016 as BIA/Kelsey forecasts it reaching $20.8 billion. This would mark a 12.1 percent increase over 2015, which was a down year—falling 7.2 percent from 2014—according to BIA/Kelsey’s report.

All regions of the U.S. are expected to rebound from 2015, with the Midwest expecting the largest increase of 14.6 percent; an 8.4 percent increase is expected in the Southwest, 11.1 percent in the East, 11.9 percent in the West, and 12.6 percent in the South. BIA/Kelsey cites the election and general rebound of the economy as reasoning for the increase.

“The election and economy, driven by stronger employment figures and continuing low interest rates, are helping push local TV ad revenues above expectations this year,” according to Mark Fratrik, senior vice president and chief economist for BIA/Kelsey.

Click on the link to see the full “2016 Investing In Television Ownership Report.”

BIA/Kelsey is an advisor to local media companies.