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BizReport : Advertising archives : March 21, 2011

Forecast: Local Online could double by 2015

As more consumers look to online outlets for news and information, more local businesses are hoping to engage them in the space. That is the takeaway from a new forecast from BIA/Kelsey, which indicates that local online ad revenues may nearly double by 2015.

by Kristina Knight

biakelsey.bmpIn 2010, local online/interactive ad revenue reach $21.7 billion (14% CAGR). By 2015, researchers predict that these local online/interactive revenues will reach more than $42 billion. This while the overall local ad spend will top $153 billion, an increase of nearly $20 billion from 2010 numbers.

"As the business climate improves and advertisers step back into the market, they are gravitating to digital options that perhaps were not as mature before the recession began," said Tom Buono, CEO, BIA/Kelsey. "Our analysis indicates that as advertisers move to online, mobile and, particularly, the variants of social media, we are fast approaching a tipping point where digital media will soon become a dominant segment of the local advertising marketplace."

The increase in digital media consumption - from mobile, Internet, tablet and other devices - is behind the strong growth rate, according to experts. Research from the Pew Internet and American Life Project backs up this belief; their researchers found that nearly half of Americans are accessing local news or information from a mobile device. Most of these consumers are not willing to pay for the content, which means that publishers will monetize another way - through advertising.

"What we're seeing in terms of media share shifts and transformation is really unprecedented," said Neal Polachek, President, BIA/Kelsey. "As we look forward, the core issue challenging advertisers is to figure out a media plan that leverages the transactional nature of digital media with the scale and reach of traditional media."

Tags: advertising forecast, advertising trends, BIA/Kelsey, local advertising, local content, local interactive ads

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