BIA/Kelsey forecasts that in local markets, digital advertising,
including mobile, will grow from $44.2 billion in 2016 to $50.2
billion in 2017 -- a 13.5% increase. Meanwhile, the use of
traditional media for local ads is expected to drop by 2.4% from
$101.1 billion in 2016 to $98.6 billion in 2017. Local ad revenue
from all platforms is expected to rise to $148.8 billion in 2017, a
modest increase of 2.4% compared to this year.
"A large part of that is because of a decline in revenue going
to print media, including newspapers, magazines and direct mail,"
said Mark Fratrik, senior VP-chief economist at BIA/Kelsey, noting
that the company expects digital local ad share will exceed that of
print media by 2018.
The overall increase in local ad revenue is the result of an
improving U.S. economy, increased spending by national brands and
local media channels, huge growth in mobile and social advertising
and continued growth of other digital and online platforms, noted
BIA/Kelsey in a statement.
A decline in ad revenue for traditional media may be the
outgrowth of a downturn in the nation's newspaper sector. A Pew
in June of this year suggested that the industry experienced a
recessionary phase in 2015, with advertising revenue facing its
greatest dip since 2009.
Within the digital advertising sphere, however, Mr. Fratrik said
mobile is expected to grow at a compounded annual growth rate of
just over 21% over the next five years. Direct mail still forms the
largest tranche of traditional advertising, comprising over 70% of
the traditional advertising market share.
The move towards digital platforms for targeted local ads does
not signal the death knell of traditional ads, said Mr. Fratrick,
as marketers will continue to use a range of media tools to reach
"Even though online digital is growing as a share and more and
more national and local advertisers are making use of it,
advertisers aren't abandoning other platforms including
over-the-air broadcasts like television, radio, billboards, taxi
cabs and elevators." he said. "It's mixes of advertising that
national and local companies use to have successful campaigns."