According to the BIA and The Kelsey Group, economic conditions over the next few years will reduce overall local advertising spending through 2013. Local advertising revenues in the United States are expected to decline from $155 billion in 2008 to $144 billion in 2013, representing a negative 1.4 percent compound annual growth rate.
Only one segment is expected to show growth over that time, which is interactive advertising. The others should see marginal or rapid declines over the next 1.5 to 3 years.
Tom Buono, president and CEO, BIA Advisory Services, sees an accelerating shift to online and an increasing demand for “accountability metrics”. According to the survey, interactive share of local ad spending will grow from 9 percent ($14 billion) in 2008 to 22.2 percent ($32 billion) in 2013. For purposes of the survey, “interactive” includes mobile, Internet Yellow Pages, local search, online verticals and classifieds, voice search, and email marketing.
In contrast, the “traditional segment” is expected to decrease from $141.3 billion in 2008 to $112.4 billion in 2013 (CAGR of -4.5%). This area includes newspapers, direct mail, television, radio, print Yellow Pages, cable television and magazines. Neal Polachek, CEO of The Kelsey Group, indicates that the share shift “could actually be more pronounced if the major traditional media are not able to integrate new interactive products into their bundle.”
With yet another major print newspaper (the Seattle Post Intelligencer) closing its doors, the transition already feels very real. If traditional media companies are to thrive over the next 10 years they will need to continue to embrace interactive strategies far more aggressively.
For more information about the survey and its methodology, click here.
