Online/digital to drive local media growth as traditional ads go flat

The Online/digital segment of local media revenues in the U.S. is forecast to grow more than 13% next year, eight times faster than local media revenues overall, a new study says. And, said BIA/Kelsey in its just-released U.S. Local Media Forecast 2015, growth in online/digital advertising revenues will remain strong, with a 12.2% CAGR through 2019. Traditional local ad revenues are forecast to decline at a -0.5% CAGR during the same period.

The report said online/digital would account for more than 25% of total local media revenues in 2015,reaching $35 billion, up from $31 billion in 2014.

Overall local media revenues are forecast to reach $139.3 billion in 2015, up from $137 billion this year, a growth rate of just 1.6%.

BIA/Kelsey said it expects Mobile local ad revenues will grow from $4.3 billion in 2014 to $6.6 billion in 2015

Leading the online/digital growth, not surprisingly, will be mobile local ad revenues. The fast-growing category is expected to reach $6.6 billion in 2015, up more than 53% from 2014’s expected $4.3 billion.

Also seeing strong growth? Local social media revenues, which could surpass $3.6 billion, up 44% from $2.5 billion in 2014.

BIA/Kelsey forecast local online video revenues to increase to $3 billion in 2015, up 30% from $2.3 billion in 2014.

The report also forecast local search revenues to increase 1.4% to $7.2 billion, up from $7.1 billion; and said local display revenues will grow 14% to $4.9 billion from $4.3 billion in 2014.

“We expect the pace of growth in the overall local advertising marketplace to moderate through 2019, resulting in a three percent compound annual growth rate,” said Mark Fratrik, chief economist, BIA/Kelsey.

BIA/Kelsey defines the local media advertising marketplace as those media that provide local audiences to all types of advertisers.  

Stay tuned.

Jim O’Neill is Editor of Videomind and Principal Analyst at Brightcove. You can follow him on Twitter @JimONeillMedia and on LinkedIn