Warc Blog

Local US adspend to rise

19 March 2013
NEW YORK: Big brands are set to increase their expenditure on local ads in the next five years, not least thanks to the possibilities promised by mobile and social media, new figures suggest.

BIA/Kelsey, the consultancy, stated in a study that local media advertising revenues would hit $148.8bn in 2017, compared with the total of $132.5bn logged in 2012.

Digital channels are expected to drive this growth, with online witnessing an expansion from $4.3bn to $6.3bn during the same timeframe, while mobile enjoyed a lift from $1bn to $6.4bn.

As a result, digital's share of the local ad market is pegged to reach 27.6% of returns by the end of the forecast period, measured against 17.4% last year.

In contrast, traditional media are due to register a slight decline in revenues from $109.4bn to $107.6bn, with political advertising boosting the category in odd-numbered years.

When breaking down outlay levels by company type, the analysis suggested that the value spend attributable to local advertisers would come in at $97.8bn in 2017, improving from $90bn in 2012.

These figures stood at $51bn and $42.5bn respectively for national advertisers, indicating their greater interest in tapping more targeted advertising solutions, and meaning their share rises to 34%.

Mark Fratrik, vice president and chief economist at BIA/Kelsey, argued that the advent of various new technologies was inspiring this process by providing big brands with a wider range of options.

"Local media has become a key channel, not only for local small businesses, but for regional businesses, national franchises and national brands targeting locally," he said.

"This is clearly seen in our tracking of market shifts in mobile, social, search, promotions, coupons and deals, native ads and sales transformation."

In further reflection of such a shift, BIA/Kelsey reported that 85% of mobile media revenues were delivered by national advertisers last year.

"Largely because it's newest, mobile has been adopted by national advertisers a little quicker than the local guys," Fratrik told Street Fight. "The national brands employ big advertising agencies that allow them to be farther along the adoption curve."

Data sourced from BIA/Kelsey, Street Fight; additional content by Warc staff

 
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