Local U.S. Ads Rise Slowly, Digital Rockets

Local advertising revenue is set to slowly climb over the next four years by low single-digit percentage growth.

BIA/Kelsey says the compounded annual growth rate will rise by 4% by 2021 — from $148.77 billion this year to $174 billion. Local ad dollars are expected to rise 2.4% this year over 2016.

In July, BIA/Kelsey estimated direct mail would continue to have the biggest share of local advertising at $37.1 billion, with local TV at $20.9 billion; online/interactive, $18.6 billion; newspapers, $16 billion; mobile, $16 billion; and local radio, $15.6 billion.

BIA/Kelsey projects major gains in local advertising with high double-digit percentage increases -- 17% more by 2021 -- will come from digital advertising: online TV, social media and mobile video. 

At the same time, it expects local traditional advertising through this period to be virtually flat -- with a 0.6% decline through 2021.

The biggest advertising category continues to be automotive spending, accounting for almost 11% -- $16.3 billion -- of the $148.77 billion in local advertising, according to new BIA/Kelsey estimates released at the TVB Forward Conference on Thursday. It adds that 68% of the local automotive advertising spend goes to all traditional media.

Looking at TV, automotive continues to command the most ad dollars of any ad category -- 26.2%, rising slightly from a year ago. BIA/Kelsey new estimates are that traditional TV spend for automotive will be $5.2 billion -- with $293 million going into online TV platforms.

After automotive’s leading share of local TV dollars, five other categories come next -- retail (12.3%), restaurant (11.3%), general services (10.2%), technology (8.3%) and healthcare (7.7%). Financial services are estimated to be at 5.3% and leisure/recreation marketers at 4.2%.

Looking at some specific categories, healthcare advertisers are now expected to spend $10.85 billion on local media in 2017, with direct mail capturing the largest share $4.15 billion. Local television captures the second-largest share, at approximately $1.61 billion.

Home furnishing stores and paint/wallpaper stores will account for almost 1% of the estimated $148.77 billion in local advertising -- at $1.5 billion. Total TV advertising -- traditional and online -- is approximately 8.5% for home furnishing stores, while paint/wallpaper stores are 7.2%.

1 comment about "Local U.S. Ads Rise Slowly, Digital Rockets".
Check to receive email when comments are posted.
  1. Ed Papazian from Media Dynamics Inc, September 29, 2017 at 11:08 a.m.

    Wayne, I believe that the "local" TV numbers being cited include time bought in various markets by national advertisers, not just their local counterparts. Typically, this amounts to about 35% of ""spot TV" ad dollars garnered by stations. Offsetting this is something like $7-8 billion of "spot cable" time, which is mainly attracting local and regional advertisers.

Next story loading loading..