The bad news for traditional local advertising markets just keeps on coming. A new forecast from BIA and The Kelsey Group, calls for local ad spending to contract through 2013. According to the forecast, released Thursday (Feb. 26), only the local interactive segment will show growth.
Between 2008 and 2013, local ad spending will decline at a 1.4 percent compound annual rate to $144.4 billion. In contrast, the share of interactive ad spending will more than double from 9 percent in 2008 to 22.2 percent in 2013.
Only a small number of traditional media will begin to rebound in 2011. The rest of the traditional media will rapidly decline in the next 18 months to 36 months.
“The share shift we expect could actually be more pronounced if the major traditional media are not able to integrate new interactive products into their bundle,” said Neal Polachek, CEO of The Kelsey Group, recently acquired by BIA.
Combined spending across mobile, Internet yellow pages, local search, online verticals and classifieds, voice search, email marketing and other interactive revenue generated by traditional media companies, is expected to grow from $14 billion in 2008 to $32.1 billion in 2013, a compound annual growth rate of 18 percent.
Traditional media, including newspapers, direct mail, TV, radio, print yellow pages, traditional out of home, cable TV and magazines, are forecast to decrease from $141.3 billion in 2008 to $112.4 billion in 2013.