• by Gavin O'Malley  @mp_gavin, April 28, 2014

Despite modest economic growth, local digital ad dollars are on pace to exceed $52.7 billion by 2018 -- up from $31.7 billion this year.
 
That’s according to a new report from BIA/Kelsey, which expects all local media advertising to surpass $158.6 billion by 2018 -- up from $133.2 billion last year.
 
“While the U.S. economy is not expected to grow very quickly over the next few years, we estimate the overall local media market will grow faster than previously thought,” Mark Fratrik, SVP and chief economist at BIA/Kelsey, explains in the new report.
 
While the entire local pie is expected to grow by 3.6% per year, the market continues to experience a steady shift toward digital media, BIA/Kelsey finds.
 
In fact, revenue from traditional media will increase only slightly from $105.3 billion in 2013 to $105.9 billion in 2018, the research firm predicts.
 
Still, Fratrik said a number of factors are contributing to the overall health of local media.
 
“Based on positive trends in the overall local media marketplace, such as faster growth in online and mobile advertising, and the fact that national and local advertisers were slightly more aggressive in their advertising expenditures in 2013 than originally thought, we are optimistic on the entire industry's ability to grow advertising revenues,” according to Fratrik.
 
Also of note, despite what BIA/Kelsey calls the “political advertising seesaw effect” from year-to-year, traditional media revenues remain remarkably steady throughout the forecast period.
 
Remarkably, mobile will make up nearly 10% (9.9%) of all local media ad dollars by 2018, the research firm forecasts.  
 
Among digital channels, that is bested only by “online/interactive,” which is expected to account for 13.1% of all local media dollars four times from now.
 
According to BIA/Kelsey, online newspapers will command 2.5% of the local media pie by 2018; online magazines will command 0.3%; Internet Yellow Pages will get a 1.1% share; online radio will 0.6%; online TV will account for 0.7%; while email will get a mere 1.5% share.   
 
BIA/Kelsey defines the local media ad marketplace as those media that provide local audiences to all types of advertisers. The firm’s annual forecast relies on proprietary data, along with public information, and feedback from clients and other various industry leaders.