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BizReport : Advertising archives : March 20, 2012

Forecast: Local media revenue growth to slow

With increased connectivity more businesses are pushing into the online space to set up store-fronts, advertise and connect with a global consumer base. But although many businesses are pushing online an updated forecast from BIA/Kelsey indicates a slowing of local media ad revenues.

by Kristina Knight

That isn't to say a grey cloud is passing over us. On the while, online/interactive/digial ad revenues are expected to increase from $21.2 billion (2011) to $38.5 billion (2016, estimated). That is an annual CAGR of nearly 13%. Local media revenues are the slow area, finds the forecast.

Because consumers are still holding tight to those purse strings in the face of higher gas prices and the economic turmoil across Europe, businesses are also holding back some of their ad dollars.

"In October, we projected the total of the U.S. local media market to be $135.9 billion in 2011," said Mark Fratrik, Vice President and Chief Economist, BIA/Kelsey. "But we now expect it to be $132.8 billion. Base on the changes in our estimates going forward, we expect the overall local media market will grow a bit more slowly over the next five years."

Local media ad revenues are forecasted to increase from $132.8 billion (2011) to just over $151 billion (2016, estimated).

Outside of local, total online/digital spending is expected to continue a steady climb. Traditional ad revenues reached $115 billion (2011) and are expected to increase to $112 billion by 2016; the online/digital sector is expected to grow from $21.2 billion (2011) to $38.5 billion (2016). So, while the total increase is spending is just under 3%, traditional revenues will climb less than 1% while online revenues will increase nearly 13%.

Tags: advertising forecast, BIA/Kelsey, local ad revenue, local marketing, online advertising

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