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TV Stations’ Local Online Ad Revenues Rising Quickly

by MarketingCharts staff
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Meanwhile, March 2012 figures from BIA/Kelsey indicate that local TV stations saw a 19% increase in their online revenues to $536 million in 2011, a figure that is expected to increase to $621 million this year and $976 million by 2016.

Total Local Online Revenue Also Up

Meanwhile, the TVB report indicates that total local online advertising revenue grew 20.6% year-over-year in 2011, rising to $16.4 billion from $13.6 a year earlier. This was a notable increase, given that revenues had only risen modestly from 2008 ($12.9 billion) to 2010 ($13.6 billion). Total local online ad revenues are forecast to maintain their upward climb, expected to increase 21.3% this year to $19.9 billion before growing another 14% to $22.7 billion in 2013.

TV Station Share of Total Grows

Broadcast TV stations took 12% share of all local online advertising revenue in 2011, representing a 15.4% increase from 10.4% share a year earlier. Pure play companies held the largest share, at 46.2%, followed by newspapers (24.7%) and directories (12.6%). Radio (1.8%) and magazines/other print (1.7%) held only fractional shares of the total, as did cable/satellite TV (1%).

Majority of Sales From Banners Ads

TV stations derived roughly 70% of their sales from untargeted banner (58.7%) and and targeted banner (11.6%) ads in 2011. Streaming video accounted for 17.1% share of sales, while email (9.7%) and paid search (2.9%) accounted for the remainder. Newspapers derived an ever greater proportion (90.1%) of their sales from banner ads, relying less on paid search and email. For directories, the gap between banner ads (52.5%) and paid search (40.4%) was much narrower, while for pure play companies, paid search accounted for 62.7% of local online advertising revenue.

Overall, paid search held 34.7% share of the local online ad market in 2011, closely followed by untargeted banner ads, at 33.2% share. Targeted banner ads accounted for 11.2% share, but are forecast to rise to 16.2% share, per a Borrell Associates forecast released in November 2011.