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BIA: Local Ads to Hit Bottom in 2010

Despite slump, new media present opportunities for fresh revenue streams

May 21, 2009

-Katy Bachman, Mediaweek


NEW YORK It's not easy to host a "Winning Media Strategies" when the numbers are going down, but that's exactly what BIA and its sister company The Kelsey Group are doing this week at their conference in Washington, D.C.

Local advertising media -- including newspapers, direct mail, TV, radio, Yellow Pages, traditional outdoor, cable TV, magazines and digital/online -- are collectively forecast to decline to $144.4 billion in 2013, down from $155 billion last year.

This year, local ad revenue will drop to $141.3 billion and hit a low of $135.8 billion in 2010, before reversing direction in 2011.

The predictions, presented Thursday by Mark Fratrik, vp of BIA advisory services, and Neal Polacheck, CEO of TKG, were based on the cyclical and secular changes in local media, as well as the state of the economy and trends in the Internet.

For some media -- including newspapers, local TV, radio, print, Yellow Pages and local regional magazines -- the Internet is causing executives to rethink business models in order to survive.

Other media -- including direct mail, outdoor, cable TV and digital/online interactive -- will need to ride out a brutal economy.

For both groups, new media present opportunities for fresh revenue streams. New media's share of total adspend is forecast to grow from $14 billion or 9 percent to $32.1 billion to 22.2 percent. Radio and TV Internet revenue are expected to climb from $805 million last year to nearly $1.9 billion in 2013.

New media's growth will occur most dramatically in search -- both local and otherwise. Queries per month per user are forecast to grow to 130 by 2013, with local queries reaching about 15 percent of the total by 2013. There are also significant opportunities in e-mail, lead generation and mobile applications.

Source: Mediaweek.com

Related: "Local Mobile Ads Poised to Grow"

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