BIA: Local Ad Spend To Hit $174B In 2021

Look for local advertising spending in the U.S. to grow 3.8% annually to $174 billion in 2021, according to BIA/Kelsey's mid-year projections on the market. The new report adjusts downward its projection for this year to $147.9 billion because of softer-than-expected economy. It also predicts shift of share from traditional media to digital and mobile.  

TVNewsCheck, July 12, 2017 7:55 AM EDT

Between 2016 and 2021, local advertising spending in the U.S. will grow 3.8% annually to $174 billion, according to BIA/Kelsey's mid-year projections on the market.

The compound annual growth "will be driven by double-digit increases in mobile and social advertising and local online and mobile video, all slated to experience at least a 17% increase by 2021," the report says.

The report slightly decreases its original projection for 2017 to $147.9 billion because of an "overall weaker than expected economy" in the first part of the year.

During the five-year period, growth in online/digital advertising will grow at 11.9% annually, while advertising on traditional media like broadcasting will bump along with 0.6% growth.

"We are on the precipice of different advertising channels taking lead positions in the local advertising marketplace," said Mark Fratrik, chief economist, BIA/Kelsey.

"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." 

Looming Challenge: In-Band Interference TV broadcasters moving to new channels or planning for ATSC 3.0 will need to be aware of the increased potential for in-band and co-channel interference in a changing broadcast environment. A new generation of signal monitoring and analysis tools significantly exceeds the capability of more traditional methods for diagnosing and managing these challenges. Here are details.

The top five recipient of the local ad spend in 2017:

• Direct Mail: $37.1 billion (25% share)
• Local TV: $20.9 billion (14% share)
• Online / Interactive: $18.6 billion (11% share)
• Newspapers: $16 billion (11% share)
• Mobile: $16 billion (11% share)
• #6 - Local Radio: $15.6 billion (10% share)

"Mobile has replaced radio in the top five media this year, but the dominant player continues to be direct mail," said Fratrik.