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Feb.
26,
2009
BIA and The Kelsey Group Forecast U.S. Local Ad Market to Contract Through 2013, Despite Gains in Digital Segments
U.S. Local Media Annual Forecast indicates current economic conditions may accelerate the shift from traditional to digital platforms.
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CHANTILLY, Va. (Feb.
26,
2009) –
Current and foreseeable economic conditions will reduce overall local advertising spending through 2013, according to the U.S. Local Media Annual Forecast (2008-2013) by BIA Advisory Services, LLC (www.bia.com) and its Kelsey Group (www.kelseygroup.com) division. BIA/Kelsey forecasts U.S. local advertising revenues to decline from $155.3 billion in 2008 to $144.4 billion in 2013, representing a negative 1.4 percent compound annual growth rate (CAGR).
Only the local interactive segment will show growth throughout the forecast period. All other local media will experience marginal to rapid declines in the next 18 to 36 months. A small number of traditional media will rebound with a revived economy beginning in 2011, though most traditional media will continue to decline, albeit at a slower pace.
“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 and CEO, BIA Advisory Services. “As the shift to online accelerates, and the demand for accountability metrics grows, there is an increased urgency for traditional media companies to develop and embrace new business models that incorporate digital strategies in order to drive business over the next decade.”
BIA and The Kelsey Group project the interactive share of local ad spending will more than double from 9 percent in 2008 to 22.2 percent in 2013. According to the forecast, the interactive segment (encompassing mobile, Internet Yellow Pages, local search, online verticals and classifieds, voice search, e-mail marketing and other interactive revenues generated by traditional media players) will grow from $14 billion in 2008 to $32.1 billion in 2013 (at a CAGR of 18%), while the traditional segment (encompassing newspapers, direct mail, television, radio, print Yellow Pages, out of home (non-digital), cable television and magazines) will decrease from $141.3 billion in 2008 to $112.4 billion in 2013 (CAGR of -4.5%).
“Within the local advertising sector, there will be a real share shift, and the players most ready to leverage and adopt interactive models will achieve greater success going forward,” said Neal Polachek, CEO, The Kelsey Group. “The share shift we expect could actually be more pronounced if the major traditional media are not able to integrate new interactive products into their bundle. Successful integration will require considerable attention to business models, product innovation and sales channel evolution.”
BIA/Kelsey U.S. Local Media Annual Forecast – The Big Picture on
‘Local’
This year’s forecast is the first to combine the deep and complementary resources and expertise of BIA and The Kelsey Group. It presents one comprehensive and authoritative view of the local media landscape, consisting of nine key segments: newspapers, direct mail, television, radio, print Yellow Pages, out of home (non-digital), cable television, magazines, and all digital and online interactive (which comprises mobile, Internet Yellow Pages, local search, online verticals and classifieds, voice search, e-mail marketing, and other interactive revenues generated by traditional media players).
BIA/Kelsey defines local advertising as spending by small and medium-sized businesses (SMBs), national advertisers and regional advertisers making local buys. The BIA/Kelsey U.S. Local Media Annual Forecast (2008-2013) draws from proprietary data; company, industry and country information in the public domain; and discussions with clients and non-clients about the direction and pace of development in the local media marketplace. Building off the forecast research, BIA/Kelsey will begin offering BIA Media Ad Views, market-specific custom reports that provide a comprehensive picture of the state of local media advertising and a five-year projection for nine different media segments.
About The Kelsey Group
The Kelsey Group, a division of BIA Advisory Services, LLC, is the leading provider
of research, data and strategic analysis on directories, small-business advertising,
online local media, vertical market advertising and mobile advertising. As
the premier analyst firm covering the directory publishing community and
the emerging local search marketplace, The Kelsey Group provides advisory
services (The Kelsey Report®, Interactive Local Media and Marketplaces),
publishing (Global Yellow Pages™), consulting (more than 400 individual
assignments) and conferences (74 events). For more information about The
Kelsey Group, visit www.kelseygroup.com. The Kelsey Group's Local Media Blog is located at http://blog.kelseygroup.com and the company can be found on Twitter through http://twitter.com/TheKelseyGroup.
About BIA Advisory Services, LLC
BIA Advisory Services, LLC, a subsidiary of BIA Financial Network,
provides research, data, analysis, and financial and strategic consulting
to media, telecommunications, technology, directory publishing, and
local search companies. BIA Advisory Services includes The Kelsey
Group, experts in traditional and online local media and advertising;
BIA Research, providers of competitive and comparative market information
and analysis through data services, specialized reporting, engineering
studies and mapping; and BIA Consulting, specialists in business
intelligence and corporate growth strategy, and the nation’s
leading communications appraisal and valuation firm. Additional information
is available at www.bia.com.BIA's blog is located at http://blog.bia.com and the company can be found on Twitter through http://twitter.com/BIAfn.
For more information contact:
Eileen Pacheco
For The Kelsey Group
(781) 556-1026 | eileen@tango-group.com
MacKenzie Lovings
BIA Advisory Services, LLC
(703) 802-2992 | mlovings@bia.com
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