Digital Ad Revenue to Rocket for Local TV, Radio

The growth of digital advertising revenue for local TV and radio will outpace overall ad spending for those media between 2009 and 2014 according to a BIA/Kelsey forecast released Tuesday (March 9).

Digital revenue from multiplatform, mobile and Web, will grow at a 17.8 percent compound annual rate to $2 billion compared to total ad revenue, which will grow at a CAGR of 2.8 percent to $34.3 billion.

By 2014, local TV digital ad revenue will reach $1.2 billion and represent 6.5 percent of TV’s total $18.3 billion in revenue, up from 3.1 percent in 2009. Radio digital revenue will reach $0.8 billion representing 5 percent of radio’s $16 billion up from 2.9 percent in 2009.

“Broadcasters must evolve to participate in more areas of the media ecosystem,” said Rick Ducey, chief strategy officer for BIA/Kelsey. “This means developing the right multiplatform and multiple revenue stream strategies which in turn requires new workflow, partnerships, business models and resources.”

Though the BIA/Kelsey forecast shows total revenue increases for both radio and TV between 2009 and 2014, both media are still playing catchup to 2008 when TV revenue totaled $20.6 billion and radio totaled $16.8 billion.

In 2010, TV revenue is expected to increase 4.3 percent to $16.8 billion with digital revenue hitting $600 million, a 20 percent increase. Radio revenue will inch up 1.5 percent to $13.9 billion, with digital revenue increasing 25 percent to $500 million.