Tuesday, February 23, 2010

A Gradual Rebound for Local Advertising

Spending on digital media for local advertising will grow about 19 percent through 2014 and will be 25 percent of total local advertising, while money spent on traditional ads will continue to decline, according to new research from BIA/Kelsey. This "steady shift toward digital media" will see online/interactive media expenditure, at about $15 billion last year, reach nearly $37 billion four years from now, the study said.


The findings, reported in BIA/Kelsey's "U.S. Local Media Annual Forecast," did not surprise BIA/Kelsey President Neal Polachek, who said the recession and lingering economic doldrums have "triggered a more rapid switch to online digital stuff." Even though companies are increasingly embracing digital media for local advertising, online/interactive was not immune to the recession's ravages. BIA/Kelsey said there was a slowdown in the growth rate for digital, including search, display and classifieds, but it predicted that digital - now about 14 percent of total local ad spend - will encompass 25 percent by 2014.


In 2008, when about $156 billion was spent on all forms of local advertising, about $141 billion was spent on traditional media, according to the researchers. The total expenditure is expected to bottom out this year, reaching only about $129 billion (with $17.5 billion going to digital). By 2014, when the total expenditure is expected to climb back to $145 billion, only $109 billion will go to traditional forms, said the report.


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