Online advertising is expected to rise from $26.5 billion in 2013 to $44.5 billion in 2017, a growth rate of 13.8% per year, according to a recent article posted on MediaPost. This rapid growth in online advertising has compelled BIA/ Kelsey to update their Local Media Forecast from March to report an overall growth in local ad revenue of 2.8% per year, versus their original projection of 2.3%.
The slowly improving U.S. economy is one factor contributing to the increased forecast of local ad revenue. Unemployment continues to drop from a peak of 10% with a current rate of 7.3% in October, with an optimistic outlook for the labor market.
The economy is chugging along, and local media is still an important part for national and local advertisers,” says Mark Fratrik, chief economist at BIA/Kelsey.
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Despite low expectations for 2013 holiday spending, the slight improvement in employment numbers coupled with relatively strong consumer spending are expected to result in a relatively healthy advertising landscape. This landscape seems to be increasingly online, while traditional advertising mediums appear stunted.
We’re bullish about the traditional media moving into online sales,” Fratrik says. Online ”is really where the growth is going to be.”
On the flip side of media, newspaper print ad revenue is expected to decline to 9.1% of total local ad revenue by 2017. Traditional broadcast advertising – TV and Radio – are both expected to decline slightly as well to 14.6% and 10.6% of total ad revenue by 2017, respectively. However, digital ad revenue for these media outlets is expected to remain steady, or even grow over the next few years.
Mobile continues rapid growth, taking all of the local media market with it, thanks to advancements such as location-targeted advertising. BIA/Kelsey raised their forecasted mobile growth from 6.1% by 2017 to 7.1% due to recent reports and evaluations.
Overall, the advertising world seems to be improving – specifically within the digital realm, as advertising portfolios are diversifying across various media segments. BIA/Kelsey claims that these forecasts are relatively modest and conservative, so these numbers may be expected to rise even further.