BIA Kelsey Expects Digital To Power Local Ad Growth

In its newly released U.S. Local Advertising Forecast 2016, BIA/Kelsey projects total local advertising revenues in the U.S. to reach $146.6 billion in 2016, up from $141.3 billion this year, representing a growth rate of 3.75 percent. Online/digital revenues will grow to $42.6 billion in 2016, 29.1 percent of total local media revenues, up from $38 billion in 2015. BIA/Kelsey defines local advertising as all advertising platforms that provide access to local audiences for national, regional and local marketers.

"For 2016, we expect total local ad revenues to nudge upward, resulting from a slightly stronger U.S. economy and a substantial amount of political advertising," said Mark Fratrik, chief economist, BIA/Kelsey. "We also adjusted our 2015 estimate for total local media spending up slightly due to stronger mobile and social advertising."

Mobile, social and video—what BIA/Kelsey refers to as the "power brew" for local advertisers—are among the categories that are fueling growth in the local online/digital segment.

2016 Forecasts for several power brew categories include:

• Location-targeted mobile ad spending will grow from $8.4 billion in 2015 to $11.3B
• Social local media revenues will grow from $2.4B in 2015 to $3.3B
• Local search revenues will grow from $7.8B in 2015 to $8.2B
• Total local display revenues will grow from $4.4B in 2015 to $4.6B
• Local video display revenues will grow from $0.7B in 2015 to $0.9B
• Mobile video revenues will grow from $0.4B in 2015 to $0.7B

Mark Fratrik

"Mobile is the primary force behind the continuing increase in digital advertising, largely driven by social advertising," explained Fratrik. "Mobile spending is growing faster than expected, cutting into the growth of other online advertising. For example, online spending on ads viewed through desktops is still increasing, but overall only at single digit growth rates as more of the attention of consumers and advertisers alike shifts to mobile. Local video spending on all platforms—mobile, online, TV over-the-air, cable and out of home—will grow, along with local video's slice of the local advertising pie."

BIA/Kelsey will present highlights from the local online/digital segment of the forecast at its upcoming conference, BIA/Kelsey NEXT: The Future of Local Digital Media, which takes place Dec. 9-10, in Los Angeles.

Visit http://www.biakelsey.com/NEXT for complete conference information, including the agenda, speakers and online registration.