Forecast: Local Media Shifting Toward Digital

The allure of targeting local audiences online and on mobile devices will change how advertisers allocate their ad budgets over the next few years. By 2014, digital media will make up 24 percent of total local advertising spending, growing from $19.6 billion in 2010 to $35.2 billion, according to a new BIA/Kelsey forecast released Tuesday (Sept. 28).

The growth of spending in local digital media will be at the expense of advertising spending in traditional media, expected to decline during the same period from $113.6 billion to $110 billion and drop in share from 85 percent to 76 percent.

During the next five years, local mobile advertising will take off, growing at a compound annual growth rate of 56.9 percent. By 2014, local mobile ad spending will reach $2 billion, up from $213 million in 2009 and increase its share of local ad spend from 0.2 percent to $1.4 percent.

“As we’ve seen in the online space over the past decade, tools will be introduced to democratize and localize the mobile ad buying process,” predicted Michael Boland, senior analyst and program director of BIA/Kelsey’s mobile local media practice. “Google has already begun to bundle mobile ad placements within its pervasive AdWords search marketing platform.”

Total local ad spending will grow from $133.3 billion in 2010 to $145.2 billion, a modest compound annual growth rate of 2.1 percent.