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BizReport : Advertising archives : March 19, 2013

Forecast: Slow, steady growth for local ad market

Look for more ad dollars to go local over the next five years, but the increase in spending probably won't seem like a lot. According to a new forecast out from BIA/Kelsey Group, local media ad revenues (US) will increase from $132.5 billion in 2012 to just over $148 billion by 2017; that is an increase for just over 2% (CAGR).

by Kristina Knight

While that isn't a huge growth rate, the amount of local dollars national brands spend will see a strong growth pattern according to the BIA/Kelsey forecast. In 2012 national brands pushed $42.5 billion into the local advertising space; they're expected to contribute more than $50 billion to local ad revenues by 2017.

Traditional, local media ad dollars are expected to decrease over the forecast period by more than $2 billion - from $109 billion (2012) to $107 billion (2017).

Meanwhile, digital ad dollars are also expected to rise, by more than 10%. Digital revenues accounted for just over 17% of the 2012 local media ad spend. By 2017, digital revenues are expected to account for at least 27.6% of the spend.

"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."

The full report will be presented at the Leading in Local conference in Boston March 18 - 20.

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

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