Local TV Broadcasting Advertising Revenue Dipped 7.8% in 2011

BIA/Kelsey report In 2011 stations took in $17.9 billion in broadcast ad revenues, compared with $19.4 billion in 2010 -- the fall off due to the weak economy and dearth of political advertising. With the return of heavy political spending this year, revenue will rebound 10% this year to $19.7 billion, the research and investment firm says. By Staff TVNewsCheck, May 1, 2012 7:51 AM EDT Local TV broadcasting advertising revenue dipped 7.8% in 2011 from the previous year, due to the sluggish economy and the dearth of political advertising typical of odd-numbered years, according to BIA/Kelsey's quarterly Investing in Television Market Report. In 2011, stations took in $17.9 billion, compared with $19.4 billion in 2010. "Local advertising industry revenues typically rise and fall depending on the political year," said Mark Fratrik, VP-chief economist, BIA/Kelsey. "Advertising income for local television is trending upward [in 2012] and showing signs of rebound, with a good first quarter for many public television companies. Still, the 2012 over-the-air television advertising market is not what it was 11 years ago." With the return of the heavy political spending this year, BIA/Kelsey sees broadcast ad revenue rebounding to $19.7 billion this year, up 10% from 2011 and up 2% from 2010, the last "political" year. Stations' broadcast ad revenue is still way down from 2006 ($22.8 billion) and, in its five-year forecast, BIA/Kelsey doesn't expect stations to attain that level again. It pegs 2016 broadcast ad revenue at $21.8 billion. The good news for broadcasters is that their digital media are beginning to make significant contributions to total revenue. In 2011, BIA/Kelsey says, television stations earned $535 million from digital, an 18.7% jump compared with $450 million in 2010. It forecasts digital revenue will grow at a compound annual rate of nearly 45% over the next five years and hit $1 billion in 2016. So, broadcast and digital revenue combined in 2016 will match 2006 broadcast revenue. "Local television stations are establishing increased expertise in packaging, pricing and selling cross-platform and multi-device ad-supported content services for their viewers," said Rick Ducey, BIA/Kelsey's managing director and program director of video local media. "We anticipate greater utilization of smartphones and tablets for engaged audience experiences with local streaming video content including news, weather and sports monetized both by advertising and sponsorships." According to BIA/Kelsey's U.S. Local Media Forecast (2011-2016) and local market ad spending analysis, Media Ad View Reports, the local advertising ecosystem continues to be dominated by traditional media, with stations' share at 13.9% of $132.8 billion in 2011 and 14.3% of $151.3 billion in 2016. In order to grow revenues, stations should concentrate on local-direct revenues instead of relying on transactional share says Dr. Philip Jay LeNoble, CEO of Executive Decision Systems, Inc. Littleton, CO.