Local Ad Spend to Climb 2.2% through 2014; Shift to Digital Continues: BIA/Kelsey

BIA/Kelsey is predicting an annual growth rate of 2.2% from 2009 for the U.S. local advertising market, reaching $144.9 billion in 2014.

Following a significant contraction in 2009, local media spending will be slow through 2011, with meaningful recovery beginning in 2012, BIA/Kelsey predicts.

The prediction for slow spending this year and next is being driven in part by the larger than previously forecast declines in newspaper and direct mail and slowing growth of the interactive/online sector (including search, display and classifieds).

However, a further ramp-up in political advertising, due to the recent Supreme Court decision, will benefit the traditional TV and radio sectors, as well as the interactive and direct mail sectors.

Shift Toward Digital Continues

BIA/Kelsey forecasts that spending on traditional media will continue to decline, from $115 billion in 2009 to $108.2 billion in 2014, or down 1.2%.

During that same time period, spending on online/interactive media will grow 19.3%, from $15.2 billion to $36.7 billion.

More than Half of Ad Spending Is Local

55% of all ad spending is with local media (defined as spending by small and medium-sized businesses, and national or regional advertisers making local buys).

In 2009, total U.S. ad spending was $235.6 billion, with $130.2 billion spent on local ad buys, BIA/Kelsey estimates.