Local Media Revenue Landscape to Change as Digital’s Influence Grows

April 28, 2014

This article is included in these additional categories:

Digital | Direct Mail | Email | Local & Directories / Small Biz | Magazines | Mobile Phone | Newspapers | Out-of-Home | Radio | Tablet | TV Advertising

BIAKelsey-US-Local-Media-Forecast-2018-v-2013-Apr2014Local media revenues are expected to increase from $133.2 billion last year to $158.6 billion in 2018, according to a recent forecast from BIA/Kelsey. Now, new figures from the researchers show how the revenue breakdown of those totals will shift during the forecast period. Not surprisingly, digital media will capture a greater share of spend at the expense of traditional channels. However, direct mail is slated to remain the single largest medium.

Last year, BIA/Kelsey estimates that slightly more than one-fifth (20.9%) of local media revenues were digital. By 2018, digital media should account for almost exactly one-third (33.2%) of revenues as the compound annual growth rate (CAGR) of 0.1% attributed to traditional media will trail the overall average of 3.6%.

What will change? The share of local media revenues attributed to online/interactive will grow from 9.9% to 13.1%. The bigger jump, of course, will be reserved for mobile, forecast to grow all the way from just 2.2% share last year to 9.9% share in 2018.

Direct mail, meanwhile, was by far the single largest local revenue driver last year, itself comprising 27.9% share of revenues. That figure should fall to 24.2% in 2018, per the researchers, remaining the single largest medium but falling behind digital media as a whole. Total dollar spending (not adjusting for inflation) on direct mail will actually inch up during the forecast period, but the rate of growth will lag the overall local media sector by a significant margin.

Meanwhile, print newspapers (13.5% share) will plummet to just 8.5% share in 2018, falling behind over-the-air radio (10.7%, down to 9.9%), online/interactive, and mobile in the process. And local newspapers’ online revenue share is only expected to grow from 2.4% to 2.5% share, essentially keeping pace with the overall market. That’s a better result than seen by the newspaper industry as a whole last year, which saw its online advertising revenues increase by only 1.5% even as US online ad revenues jumped 17%.

While print newspapers – and to a lesser extent over-the-air radio – will see their share of the local media pie shrink during the forecast period, over-the-air TV is expected to hold steady at about 14% share, as is out-of-home, at roughly 6% share.

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