BIA/Kelsey Sees Local Ad Rebound -- In 2012
February 19, 2010: In a new U.S. Local Media Forecast covering 2009-2014, BIA/Kelsey projects that local ad spending will reach $144.9 billion in 2014. After the "significant contraction" in 2009, BIA/Kelsey sees spending staying slow through 2011, with a "meaningful recovery beginning in 2012."
"The general economic conditions worsened during 2009, causing advertising dollars to remain on the sidelines as businesses -- large and small, local, regional and national -- reined in spending levels," BIA/Kelsey President Neal Polachek said. "Even with improvements in the overall economy, we do not anticipate a rapid recovery among traditional media over the forecast period because we believe the structural change in the local media industry has accelerated."
BIA/Kelsey projects that spending on traditional media will drop from $115 billion in 2009 to $108.2 billion in 2014, while spending on online/interactive media grows from $15.2 billion to $36.7 billion over the same period.
The company cites several forecast as "key drivers" in its forecast, including a further ramp-up in political advertising due to the recent U.S. Supreme Court decision that lifted some restrictions on political ads and, BIA/Kelsey says, will benefit radio and TV as well as online and direct mail. Other factors are larger than previously forecast declines in newspapers and direct mail and slowing growth in online/interactive.
The forecast also shows that 55 percent of all ad spending is with local media, defined as spending by small and medium-sized businesses and national or regional advertisers making local buys. BIA/Kelsey estimates that $130.2 billion of approximately $235.6 billion in U.S. ad spending in 2009 was local.
BIA/Kelsey bases its forecast on proprietary data, information publicly available, and discussions with clients and non-clients.
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