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Radio Drops From Top Five in Ad Revenue


In the midyear update to its U.S. Local Advertising Forecast 2017, BIA/Kelsey forecasts the overall local media marketplace to experience consistent growth from 2016-2021, reaching approximately $174 billion by 2021 (compound annual growth rate: 3.8%). However, in the mix, local radio has dropped out of the top five. This growth will be driven by double-digit increases in mobile and social advertising and local online and mobile video, all slated to experience at least a 17 percent increase by 2021.

According to the forecast, the top five media (revenues and share of market) contributing to the local media pie in 2017 are:

  1. Direct Mail: $37.1 billion (25% share)
  2. Local TV: $20.9 billion (14% share)
  3. Online / Interactive: $18.6 billion (11% share)
  4. Newspapers: $16 billion (11% share)
  5. Mobile: $16 billion (11% share)
  6. Local Radio: $15.6 billion (10% share)

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

For 2017, the firm has slightly decreased their advertising estimate to $147.9 billion. An overall weaker than expected economy in the beginning of 2017 has led to softness in advertising revenues. However, future growth in online/digital advertising revenues will be higher than originally predicted, with a 2016-2021 CAGR of 11.9%. Over the same period, traditional advertising revenues will see a slight decrease in the 2016-2021 period with a CAGR of -0.6%.

"We are on the precipice of different advertising channels taking lead positions in the local advertising marketplace," said Mark Fratrik, chief economist, BIA/Kelsey. "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."

The BIA/Kelsey U.S. Local Advertising Forecast 2017 is a five-year forecast that delivers a national overview of total U.S. spending in local markets and includes individual forecast breakouts for the following media: direct mail, local video, online/interactive (i.e. local search and local display), newspapers, mobile, radio, out-of-home/OOH video, directories (i.e. PYP and IYP), social and local magazines. BIA/Kelsey defines local advertising as all advertising platforms that provide access to local audiences for national, regional and local marketers.

Access to the forecast is available by purchasing the report or by subscribing to the firm's local advertising dashboard, BIA ADVantage. For more information, email sales@biakelsey.com.

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