• by David Goetzl , February 27, 2009

A well-known researcher is projecting that the local ad market will continue to experience revenue dropoffs. More startling: the forecast covers the next five years--during which, some experts have predicted, the economy will presumably begin its turnaround. 

Between 2008 and 2013,local business will undergo an 8% fall from $155.3 billion last year to $144.4 billion in 2013, according to BIA/Kelsey. Within traditional media, the group is projecting a 26% fall.

Those figures include local newspapers, for which struggles are at epic proportions and the future is increasingly uncertain.

BIA/Kelsey said only the local interactive business will grow steadily over the 2008-13 period. Share of local spending is projected to grow from 9% in 2008 to nearly one-quarter of that market in 2013. (Interactive includes mobile, Internet Yellow Pages and local search, among others.) Total revenues will grow from $14 billion in 2008 to $32.1 million in 2013.

Traditional media's 26% drop will be from $141.3 billion in 2008 to $112.4 billion in 2013. That segment stretches from newspapers to TV to out-of-home.

BIA/Kelsey said some traditional media will show improvement in 2011, since the economy may improve. But overall, it could only slow the rate of decline.

"By the end of the forecast period, the overall size of the local advertising market will be considerably smaller than it was at the end of 2008," said Tom Buono, president and CEO, BIA Advisory Services.

"As the shift to online accelerates, and the demand for accountability metrics grows," he says, "there is an increased urgency for traditional media companies to develop and embrace new business models that incorporate digital strategies in order to drive business over the next decade."