According to a mid-year update from BIA/Kelsey’s 2017 Local Advertising Forecast, published this morning, the local media marketplace is poised to deliver double digit advertising growth over the next five years, reaching nearly $174 billion by 2021.
It might not come as a surprise to see that future growth in online/digital ad revenues looks to be greater than growth in traditional ad revenues, including local television. In fact, online/digital ad revenue growth appears to be even stronger than originally predicted, with a compound annual growth rate of 11.9 percent from 2016-2021.
Traditional ad revenues will deliver a slight decrease in compound annual growth rate of (-0.6 percent) during the same five-year period, according to the mid-year forecast.
While local television ad revenue might not see significant growth annually over the next five years, the medium still makes up 14 percent of the “media pie” for 2017, or $20.9 billion dollars in advertising. Only direct mail ($37.1 billion) makes up a bigger piece of the pie (25 percent).
- Direct Mail: $37.1 billion (25 percent)
- Local TV: $20.9 billion (14 percent)
- Online / Interactive: $18.6 billion (11 percent)
- Newspapers: $16 billion (11 percent)
- Mobile: $16 billion (11 percent)
“We are on the precipice of different advertising channels taking lead positions in the local advertising marketplace,” says Mark Fratrik, chief economist for BIA/Kelsey, in a statement. “Although national and local businesses still utilize a mix of digital and traditional advertising platforms, the opportunities afforded by mobile, social and video advertising are incredibly valuable due to their measurability, adoption by consumers and enhancements by technologies such as beacons and data attribution that blend extraordinarily well with today’s mobile consumer.”