U.S. Local Ad Revenues to Reach $145 Billion in 2014

CHANTILLY, VA.:Local ad spending will hit nearly $145 billion in the United States in four years, BIA/Kelsey predicts. The projected sum represents an annual compound growth rate of 2.2 percent from last year, slowed down by sluggish growth through next year. The real recovery sill start in 2012, BIA/Kelsey analysts say, and it won’t necessarily involve the full restoration of traditional media.

“Even with improvements in the overall economy, we do not anticipate a rapid recovery among traditional media over the forecast period, because we believe the structural change in the local media industry has accelerated,” said Neal Polachek, president of BIA/Kelsey.

BIA/Kelsey forecasts spending on traditional media to decline from $115 billion in 2009 to $108.2 billion in 2014, a CAGR of -1.2 percent. The money is going online. During the same period, spending on online and interactive media is projected to grow from $15.2 billion to $36.7 billion, a CAGR of 19.3 percent.

Key factors influencing the forecast include newspaper and direct-mail declines that were larger than previously anticipated; slow growth of online search, display and classifieds; and a further ramp-up of political advertising due to the relaxed corporate participation rules.

BIA/Kelsey said 55 percent of all ad spending would be local as defined by small and medium-sized business spending, and national advertisers or regional advertisers making local buys. In 2009, total U.S. ad spending was $235.6 billion--based on BIA/Kelsey’s estimate of the local segment and estimates by several market forecasters focused on national spending. Of that, BIA/Kelsey estimates $130.2 billion was spent on local ad buys, with $105.4 billion attributed to national advertising.

(image by Henríquez Palma)

More from BIA:
January 20, 2010:“BIA is Big on Local Media for 2010”
“The mix of technology, usage and advertiser trends will further define the pace and change of mobile media and affirm the core role mobile will play in the $140 billion local media industry.”

December 22, 2009: “TV Revenues End 2009 Down 22 Percent”
The television industry is ending 2009 with lower than expected revenues of $15.6 billion, a 22.4 percent decline from 2008.

May 8, 2009: “Broadcast Internet Revenues are on the Rise”
TV and radio stations took in $805 million online last year, or around 7.3 percent of the $11 billion in local online ad spending. Of the $805 million, TV took $463 million and $342 million went to radio.

May 4, 2009:TV Needs New Ideas to Create New Revenues
TV industry revenues will fall below the $20 billion mark this year for the first time since 2003.

March 20, 2009: “Mobile DTV Poised for Rising Revenue Waves”
Mobile advertising revenues will hit $3.1 billion in 2013, up from $160 million last year.