BIA/Kelsey projects total local advertising revenues in the U.S. will reach $146.6 billion in 2016, up from $141.3 billion this year, representing a growth rate of 3.75 percent. Online/digital revenues will grow to $42.6 billion in 2016, 29.1 percent of total local media revenues, up from $38 billion in 2015. BIA/Kelsey defines local advertising as all ad platforms that provide access to local audiences for national, regional and local marketers.

“For 2016, we expect total local ad revenues to nudge upward, resulting from a slightly stronger U.S. economy and a substantial amount of political advertising,” said Mark Fratrik, chief economist, BIA/Kelsey, which is based in Chantilly, Va. “We also adjusted our 2015 estimate for total local media spending up slightly due to stronger mobile and social advertising.”

The Power Brew: Mobile, Social, Video

Mobile, social and video—what BIA/Kelsey refers to as the “power brew” for local advertisers—are among the categories that are fueling growth in the local online/digital segment. Forecasts for several power brew categories include:

  • Location-targeted mobile ad spending will grow from $8.4 billion in 2015 to $11.3 billion in 2016
  • Social local media revenues will grow from $2.4 billion in 2015 to $3.3 billion in 2016
  • Local search revenues will grow from $7.8 billion in 2015 to $8.2 billion in 2016
  • Total local display revenues will grow from $4.4 billion in 2015 to $4.6 billion in 2016
  • Local video display revenues will grow from $0.7 billion in 2015 to $0.9 billion in 2016
  • Mobile video revenues will grow from $0.4 billion in 2015 to $0.7 billion in 2016

“Mobile is the primary force behind the continuing increase in digital advertising, largely driven by social advertising,” explained Fratrik. “Mobile spending is growing faster than expected, cutting into the growth of other online advertising. For example, online spending on ads viewed through desktops is still increasing, but overall only at single digit growth rates as more of the attention of consumers and advertisers alike shifts to mobile. Local video spending on all platforms—mobile, online, TV over-the-air, cable and out of home—will grow, along with local video’s slice of the local advertising pie.”

 

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