Local TV Revenues Dropped in ’11, But Strong Rebound Forecast

biakelsey-local-tv-advertising-revenue-2006-2016-may2012.jpgLocal TV over-the-air (OTA) revenues dropped 7.8% year-over-year in 2011 from $19.4 billion to $17.9 billion, due primarily to the economy and the odd-year election cycle, details BIA/Kelsey in a May 2012 report. Online revenue sources were strong, though, at $535 million, marking an 18.7% rise compared to the $450 million that local TV stations earned online in 2010. This year, combined OTA and online revenues are predicted to rebound and pass the $20 billion mark to reach $20.3 billion, driven by presidential and other elections, a better consumer spending environment, and continued growth in online ad spending.

According to a March 2012 TVB study conducted by Borrell Associates, TV stations’ local online advertising revenue rose to $1.97 billion in 2011, representing more than 40% growth from $1.4 billion in 2010, and double the revenue from 2008.

Traditional Media Dominates Local Ad Market

According to other data released by BIA/Kelsey, the $132.8 billion in local media revenues were dominated by traditional media in 2011. Direct mail held a leading 28.8% share, followed by newspapers (17.9%), TV (13.9%), and radio (11%). By contrast, online/interactive (7.8%) and mobile (0.6%) combined accounted for less than 10% of total revenues.

Online, Mobile to Grow Share

The local ad market picture will be similar in 2016, forecasts BIA/Kelsey, although some shifts will have taken place. Direct mail will still hold the largest share of local revenue, forecast at $151.3 billion, but at a slightly lower 27.6% share. TV (14.3%) and radio (11.7%) will have grown marginally, while the share held by newspapers will have dropped to 13.2%.

The big winners will be online/interactive (growing from 7.8% share to 10.8% share) and mobile (from 0.6% share to 2.7% share).

Other Findings:

  • Despite the rebound predicted for local TV advertising income this year, the $20.3 billion forecast is still below total revenues from 2006 ($22.8 billion).
  • Out-of-home’s share of US local media revenues is predicted to grow from 5.3% in 2011 to 6.2% in 2016. Also growing will be cable’s share, from 4.7% to 5.2%, while magazines (2.1% vs. 2.4%) and Yellow Pages (4.7% vs. 6.7%) will see a drop.