Local Advertising Revenues Will See Double-Digit Increases, Surpass $174 Billion by 2021

Mobile and local video will drive ad revenue growth

Local news ad spending should increase over the next 5 years. Sources: Getty Images
Headshot of A.J. Katz

The local media marketplace is poised to deliver solidly consistent advertising growth over the next five years, reaching nearly $174 billion by 2021. This is according to BIA/Kelsey’s mid-year update to its 2017 Local Advertising Forecast, which presents a national overview of total U.S. spending in local markets over a five-year period (2016-2021).

According to the updated forecast, released Wednesday morning, growth in local media advertising will be driven by double-digit increases in mobile and social advertising, as well as local online and mobile video, all of which are slated to experience at least a 17 percent increase by the year 2021.

For 2017, BIA/Kelsey has slightly decreased their advertising estimate to $147.9 billion. This decreased estimate is due to a weaker than expected economy in the first half of 2017 which has led to an overall softness in ad revenues.

According to the forecast, future growth in online/digital ad revenues looks to be greater than originally predicted, with a compound annual growth rate of 11.9 percent from 2016-2021. Traditional advertising revenues will deliver a slight decrease in compound annual growth rate of (-0.6 percent) during the same five-year period.

“We are on the precipice of different advertising channels taking lead positions in the local advertising marketplace,” says Mark Fratrik, chief economist for BIA/Kelsey, in a statement. “Although national and local businesses still utilize a mix of digital and traditional advertising platforms, the opportunities afforded by mobile, social and video advertising are incredibly valuable due to their measurability, adoption by consumers and enhancements by technologies such as beacons and data attribution that blend extraordinarily well with today’s mobile consumer.”

According to BIA/Kelsey’s forecast, the top five types of media (in terms of revenue and market share) contributing to this “local media pie” in 2017 are:

  • Direct Mail: $37.1 billion (25 percent)
  • Local TV: $20.9 billion (14 percent)
  • Online / Interactive: $18.6 billion (11 percent)
  • Newspapers: $16 billion (11 percent)
  • Mobile: $16 billion (11 percent)

Local radio has dropped to No. 6, with $15.6 billion revenue (10 percent of market share).

“Mobile has replaced radio in the top five media this year, but the dominant player continues to be direct mail,” continued Fratrik.

@ajkatztv aj.katz@adweek.com A.J. Katz is the senior editor of Adweek's TVNewser.