If you’re looking for an effective place to invest you company’s advertising and marketing budget in the coming years, you should consider the burgeoning local online/interactive/digital advertising segment of local media advertising.
BIA/Kelsey, a key adviser to leading companies in the local media industry, has released its U.S. Local Media Forecast for 2011-2016. The report forecasts that especially strong growth in the digital segment of local media advertising through the year 2016.
According to the firm’s forecast, local online/interactive/digital advertising revenues will climb from $21.2 billion in 2011 to $38.5 billion by 2016. This represents an annual growth rate of 12.7%. Figures include the rapidly growing field of mobile advertising. According to a BIA/Kelsey news release, the report forecasts total U.S. local advertising revenues at $151.3 billion in 2016, up from $132.8 billion in 2011.
BIA/Kelsey now predicts an annual growth rate of just 0.2 percent in traditional local media advertising revenue between 2011 and 2016. There are a variety of factors contributing to the downward revision. These include the European economic crisis and continued high unemployment in the U.S. Both factors have caused businesses to hold back on spending for goods and services, including advertising.
While traditional media growth appears to be slowing, the firm states that digital and interactive local advertising will see a large amount growth through 2016. The forecast shows that online/interactive/digital advertising revenues will see an annual compound growth rate of 12.7 percent, including revenue from the mobile market. The report pegs the digital segment at $38.5 billion in revenues by 2016, which would be up from the $21.2 billion in 2011.
Offsetting the lack of new revenue expected in the traditional media, accordingly, a greater percentage of local spending will be in digital advertising in each successive year. By 2016, digital will constitute 25.5% of all local advertising revenue, an increase of 16% from 2011.