BIA: Local Advertising to Hit Bottom in 2010

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 morning (May 21) by Mark Fratrik, vp of BIA advisory services and Neal Polacheck, CEO of the Kelsey Group, were based on the cyclical and secular changes in local media of the economy and 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.

In the cases of both media groups, new media presents opportunities for new 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 and local search. 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, which the authors caution might be a conservative estimate. There are also significant opportunities for media in email, lead generation, and mobile applications.