Local media ad revenues are set to increase 19% by 2018, according to new figures released by BIA/Kelsey, climbing from $133.2 billion in 2013 to $158.6 billion in 2018. The compound annual growth rate of 3.6% represents faster growth than previously expected, strengthened by projected political and Olympic advertising. Meanwhile, local digital media is set to continue its increase in total market share, increasing from $31.7 billion (23 percent) in 2014 to $52.7 billion (33.2 percent) in 2018.
Mark Fratrik, a senior vice president and chief economist, BIA/Kelsey told Street Fight that while the U.S. economy was not expected to grow very rapidly in the next few years, the local media market was projected to see a strong uptick.
“We obviously have seen the faster pace of increase in mobile advertising revenues, whether it’s from Facebook or Google or elsewhere — that was a big driver,” Fratrik said. Meanwhile, he said, the decrease in newspaper revenues wasn’t as fast as expected; broadcast television and radio are increasing; and other media like out-of-home and cable are increasing.
“Sometimes we get so overwhelmed with the impressive increase in digital, online, and interactive that we forget that print and traditional media aren’t completely disappearing,” said Fratrik. “For advertisers it’s still important to have a balance. It’s important that advertisers of various sizes utilize a lot of different kinds of media.” The report says that revenue from traditional local media is expected to increase slightly, from $105.3 billion in 2013 to $105.9 billion in 2018.
But it’s clear nonetheless that mobile is playing an increasingly important role in local marketing campaigns. Fratrik says that the category’s revenues are increasing faster than had been projected throughout the past year, and that brand advertisers are starting to get a better handle on it.
“Clearly they’re doing more than dipping their toes into the water,” said Fratrik. “There will still be substantial increases in mobile advertising. … Any advertising campaign that doesn’t have some mobile component will not be as strong or effective — everyone should be using mobile in one form or another.”
But Fratrik underscored the fact that mobile was just one element in marketers’ toolkits, and that there were many ways to reach local consumers. With so many new potential vehicles, it’s currently a wide advertising marketplace, he said: “We’re very bullish.”
David Hirschman is a co-founder of Street Fight.