BIA/Kelsey Forecasts U.S. Local Advertising Revenues to Reach $144.9B
in 2014
Following declines through 2011, BIA/Kelsey expects a rebound in local media
spending beginning in 2012
CHANTILLY, Va. (Feb. 22, 2010) - In its U.S. Local Media Annual Forecast
(2009-2014), BIA/Kelsey forecasts the U.S. local advertising market
to reach $144.9 billion in 2014, representing a modest compound annual
growth rate of 2.2 percent from 2009. A closer look at the forecast
period reveals, following a significant contraction in 2009, local
media spending is expected to be slow through 2011, with meaningful
recovery beginning in 2012.
“The general economic conditions
worsened during 2009 causing advertising dollars to remain on the sidelines
as businesses — large and small, local, regional and national — reined
in spending levels,” said Neal Polachek, president, BIA/Kelsey. “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.”
Indeed,
a steady shift toward digital media continues.
BIA/Kelsey forecasts spending on traditional media to decline from
$115 billion in 2009 to $108.2 billion in 2014 (CAGR of -1.2 percent).
During the same period, spending on online/interactive media is projected
to grow from $15.2 billion to $36.7 billion (CAGR of 19.3 percent).
BIA/Kelsey reports among the key drivers of this year’s forecast are:
Larger than
previously forecast declines in newspapers
and direct mail
Slowing growth of the interactive/online
sector, including search, display and classifieds
A further ramp-up in political advertising,
due to the recent U.S. Supreme Court decision,
which will benefit the traditional television
and radio sectors, as well as the interactive
and direct mail sectors
More Than Half of All Ad Spending Is ‘Local’
The forecast reveals 55 percent of all ad
spending is with local media, defined in this
forecast as spending by small and medium-sized
businesses 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.
BIA/Kelsey’s Annual U.S. Local Media
Forecast — The Big Picture on ‘Local’
BIA/Kelsey’s Annual U.S. Local Media
Forecast presents one comprehensive and authoritative
view of the local media landscape. The forecast
draws from proprietary data; company, industry
and country information in the public domain;
and discussions with clients and non-clients
about the direction and pace of development
in the local media marketplace.
The forecast,
including deep dives into various sectors,
is provided to clients of the firm’s
Continuous Advisory Services, as an independent,
objective and credible five-year market outlook,
offering a view into the key drivers and assumptions
behind the top-line numbers. The forecast also
serves as the foundation for BIA/Kelsey’s
Media Ad View reports (www.kelseygroup.com/media-ad-view),
market-specific reports that provide a comprehensive
picture of the state of local media advertising
and a five-year projection for 12 media categories
in 362 markets across the nation. For information
on BIA/Kelsey’s Continuous Advisory Services
and Media Ad View, please contact Michael Taylor
at mtaylor@kelseygroup.com.
About BIA/Kelsey
BIA/Kelsey advises companies in the local
media space through consulting and valuation
services, research, Continuous Advisory Services
and conferences. Since 1983 BIA/Kelsey has
been a resource to the media, mobile advertising,
telecommunications, Yellow Pages and electronic
directory markets, as well as to government
agencies, law firms and investment companies
looking to understand trends and revenue drivers.
BIA/Kelsey's annual conferences draw executives
from across industries seeking expert guidance
on how companies are finding innovative ways
to grow. Additional information is available
at www.bia.com and www.kelseygroup.com.
The company's blogs are located at http://blog.bia.com/bia/ and http://blog.kelseygroup.com/,
and it can be found on Twitter through http://twitter.com/BIAKelsey.
