Commentary

Accelerated Shift to Digital Media Platforms Predicted

According to the U.S. Local Media Annual Forecast, 2008-2013, by BIA Advisory Services and its Kelsey Group, current and foreseeable economic conditions will reduce overall local advertising spending through 2013. BIA/Kelsey forecasts U.S. local advertising revenues to decline from $155.3 billion in 2008 to $144.4 billion in 2013, representing a negative 1.4 percent compound annual growth rate.

Only the local interactive segment will show growth throughout the forecast period. All other local media will experience marginal to rapid declines in the next 18 to 36 months, says the report. A small number of traditional media will rebound with a revived economy beginning in 2011, though most traditional media will continue to decline at a slower pace.

According to the forecast, the interactive segment (mobile, Internet Yellow Pages, local search, online verticals and classifieds, voice search, e-mail marketing and other interactive revenues generated by traditional media players) will grow from $14 billion in 2008 to $32.1 billion in 2013. The traditional segment (newspapers, direct mail, television, radio, print Yellow Pages, non-digital out of home, cable TV and magazines) will decrease from $141.3 billion in 2008 to $112.4 billion in 2013.

US Local Ad Spending Forecast (Billion Dollars)

 

Digital Media

Traditional Media

Year

Spend

Share

Spend

Share

2008

$14.0

9.0%

$141.3

91.0%

2009

16.3

11.5

125.1

88.5

2010

18.9

13.9

116.9

86.1

2011

22.9

16.7

114.0

83.3

2012

27.2

19.3

80.7

113.6

2013

32.1

22.2

77.8

112.4

Source: Kelsey Group (Mktg Charts), February 2009

Tom Buono, president and CEO, BIA Advisory Services, says "... As the shift to online accelerates, and the demand for accountability metrics grows, there is an increased urgency for traditional media companies to develop and embrace new business models that incorporate digital strategies... to drive business... "

Neal Polachek, CEO, The Kelsey Group, concludes "... the share shift... could actually be more pronounced... successful integration will require considerable attention to business models, product innovation and sales channel evolution."

For additional information, please visit the KelseyGroup here.

 

4 comments about "Accelerated Shift to Digital Media Platforms Predicted ".
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  1. Michael Costantino from AOL, March 17, 2009 at 8:48 a.m.

    The numbers in the table are transposed for Trad Media Spend/Share 2012 & 2013.

  2. Sue Dimanno from Boston Globe, March 17, 2009 at 9:28 a.m.

    Thank you --- I was trying to figure out how trad'l media could garner a 112% share!

  3. Jeffrey Hardy from FilmProfit, LLC, March 17, 2009 at 1:28 p.m.

    BUt even if transposed, above we have 100% on each row, and then we have 130%+ in the bottom two rows. Errkkk! Eeeeps! or is it whoops! Or are we just growing the pie? Why not growing above, where we have larger numbers ($) overall. Errkkk!
    Jeffrey Hardy

  4. Mariam Ispahani, March 18, 2009 at 2:29 p.m.

    good to see this data... will tweet it on twitter.

    -m-

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