Local Media Not Forecast to Grow ‘Til ’12

Advertising spending on local media is not expected to grow until 2012, according to a forecast released Monday (Feb. 22) by BIA/Kelsey. By 2014, the U.S. local advertising market will reach $144.9 billion, a modest compound annual growth rate of 2.2 percent from 2009.

Although ad spending in local media represents 55 percent of all advertising spending, the medium dipped from a high of $156.3 billion in 2008 to $130.2 billion in 2009. In 2010, spending is expected to decrease slightly to $128.9 billion and then remain virtually flat in 2011 before climbing to $134.1 billion in 2012.

“Even with improvements in the overall economy, we do not anticipate a rapid recovery among traditional media over the forecast period, because we believe the structural change in the local media industry has accelerated,” said Neal Polachek, president of BIA/Kelsey.

While local media struggles to regain momentum, the shift to digital continues. In 2008, digital represented 10 percent of local ad spending. By 2014, digital will make up a quarter of the total local media dollars.

Spending on traditional media will decline from $115 billion in 2009 to $108.2 billion in 2014. At the same time, spending on online/interactive will grow from $15.2 billion to $36.7 billion, a compound annual growth rate of 19.3 percent.