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QUICK HIT: Local Ad Revenues to Hit $148.8B in 2017

Posted on 10.30.2016

BIA/Kelsey's new "U.S. Local Advertising Forecast" (2017) projects that total local advertising revenues in the U.S. could reach $148.8 billion in 2017, up from $145.2 billion this year, representing a growth rate of 2.4 percent. If political advertising was excluded, the growth rate would be 3.9 percent for 2017.

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Faster growth in online/digital advertising revenues is reportedly a major driver of the projected increases in the overall local advertising ecosystem. BIA/Kelsey estimates online/digital will increase at 13.5 percent, from $44.2 billion in 2016 to $50.2 billion in 2017.

“A range of factors will drive local ad revenues higher in 2017 and through the end of the next year,” said Mark Fratrik, SVP and chief economist at BIA/Kelsey. “An improving U.S. economy, increased spending by national brands in local media channels, extraordinary growth in mobile and social advertising, and the continued expansion and selection of online/digital advertising platforms. In fact, we are predicting that online/digital local ad share will exceed the share of print media by 2018.”

Additional highlights from the BIA/Kelsey forecast include that local desktop display (inclusive of video and social) is expected to have a 10.3 percent compound annual growth rate (CAGR), as improved broadband access makes more high quality online streaming and sharing of content easier. What's more, local search on desktop devices is expected to grow at a 5.7 percent CAGR as more search activity takes place on mobile devices and mobile cannibalizes search dollars from desktop.

Search and display ads are obviously a significant part of the local ecosystem, but there are others. Email, for example, is expected to grow at a 4.7 percent CAGR, driven by volume increases with consumers choosing to opt in to more lists of their favorite businesses.


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