Local Online Ads To Hit $42 Billion By '15, Digital Dominates Future

Thanks to an improving economy and new technology, local online ad revenues will reach $42.5 billion by 2015, according to new research from BIA/Kelsey. That would represent a nearly 100% increase over the $21.7 billion spent on local online advertising in 2010, and a compound annual growth rate of 14.4%.

The growth is contingent on an anticipated improvement in the U.S. economy, and a continued rise in overall local advertising, which BIA/Kelsey expects will hit $153.5 billion by 2015 -- up from $136.3 billion in 2010.

As digital media -- delivered to consumers through mobile, Internet or other channels -- continues to gain traction with local advertisers, it will represent 23.6% of all local ad spending by 2015, according to Tom Buono, CEO of BIA/Kelsey.

"As the business climate improves and advertisers step back into the market, they are gravitating to digital options that perhaps were not as mature before the recession began," said Buono. "Our analysis indicates that as advertisers move to online, mobile and particularly, the variants of social media, we are fast approaching a tipping point where digital media will soon become a dominant segment of the local advertising marketplace."

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Among key drivers of BIA/Kelsey's forecast, Buono cites the increased number of smartphones and tablets, which are already playing a role in affecting revenue shares earned by traditional media.

The research firm also sees continued significant newspaper revenue erosion, which will drive pay walls and other creative approaches for rebuilding revenue bases.

BIA/Kelsey's U.S. Local Media Annual Forecast also notes that social forms of digital media are increasingly becoming an important component of online revenues. Consumer spending on deal-a-day offers, which the firm expects will grow to $3.9 billion by 2015, illustrates an expanding market that includes Facebook and Twitter.

BIA/Kelsey defines local advertising as local spending by small and medium-sized businesses and national and regional advertisers making local buys.

1 comment about "Local Online Ads To Hit $42 Billion By '15, Digital Dominates Future".
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  1. Mark Burrell from Tongal, April 4, 2011 at 7:37 p.m.

    wow, that's a huge number.

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