Forecast: ‘Moderate’ local ad growth through 2019.

Inside Radio

September 22, 2014

Total local media revenues will grow 1.6% from $137 billion this year to $139.3 billion next year, according to a new forecast from BIA Kelsey.  Digital will be 2015’s local media growth driver, forecast to upshift 13.1% to $35 billion and account for one of every four dollars spent on local media.  But the lion’s share of local ad dollars will continue to flow to traditional media.

The forecast predicts they’ll total $104.2 billion, despite a 1.7% decline in traditional ad spending.  Digital’s rising stars are mobile local advertising, which is poised to jump 54% from $4.3 billion to $6.6 billion in 2015, and local social media, which is expected to surge 44% to $3.6 billion.  Local search will grab the largest piece of the local digital pie ($7.2 billion) but grow only 1.6%.  Local display, a segment that continues to be a moneymaker for radio, is behind search in market share with $4.9 billion in forecasted revenue, up 13.5% from this year.

BIA/Kelsey chief economist Mark Fratrik says the pace of growth in the overall local ad marketplace will moderate through 2019 at a 3% compound annual growth rate.  A steady shift to digital will continue at a 12.2% compound annual growth rate while traditional billings  will remain “essentially flat” during the same period.

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