Local Ad Spending Forecast to Decline Through 2013

Even After Recession, Not Much Hope for a Recovery

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NEW YORK (AdAge.com) -- Local ad spending isn't coming back for most traditional media even after this hellish recession lifts, a new forecast warns.

Local advertising revenue will decline to $144.4 billion in 2013 from $155.3 billion last year, posting a 1.4% compound annual decline, according to the latest annual forecast by BIA Advisory Services, a specialist in research on directories, small-business advertising and local media spending. The digital segment will continue to grow throughout that period, BIA said, but all other local media will see drops ranging from mild to manic.

The ominous forecast helps explain why Hearst can seriously consider shutting down the San Francisco Chronicle, a big daily with a very desirable readership. For traditional publishers that rely heavily on local ad buys, even the recovery isn't looking so good.

Some traditional media companies will rebound along with the economy in 2011, the forecast says. But most traditional media will keep declining -- if at a slower rate. Local ad spending in traditional media, from newspapers to cable TV, will sink to $112.4 billion in 2013 from $141.3 billion last year.

"By the end of the forecast period, the overall size of the local advertising market will be considerably smaller than it was at the end of 2008," said Tom Buono, president-CEO at BIA Advisory Services, in a statement that accompanied the forecast's top line.

Interactive media's share of local ad spending will grow, on the other hand, to $32.1 billion in 2013 from $14 billion in 2008, an 18% compound growth rate, BIA said. That would bring interactive media's share of local advertising to 22.2% in 2013 from 9% last year.

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