All other media (TV, print, radio, Yellow Pages, online/interactive) will also see growth in local ad spend, but not nearly at the pace of local mobile. Spending in those other media was $132.1 billion in 2011, and grew by just under 1% to reach $133.4 billion in 2012. The BIA/Kelsey forecast sees that spending reaching $141.3 billion in 2016.
Overall, then, US mobile local ad revenues will achieve a compound annual growth rate (CAGR) of 54.2%, and move from 0.6% share of local media ad revenues in 2011 to 3.1% share in 2016.
Local Will Move From Minority To Majority Share of Mobile Revenues
BIA/Kelsey separately projected US mobile ad spending to grow from $1.6 billion in 2011 to $9.9 billion in 2016 (significantly above the $7.7 billion forecast from April). Local ad revenues will eat up a chunk of that growth in revenue: while locally targeted mobile ads represented a minority share (41%) of US mobile ad spending in 2011, they ought to reach a strong majority share (58%) in 2016.
Growth drivers for local mobile ads include smartphone penetration (estimated at 51% of US mobile subscribers by the latest comScore data), plus mobile web usage and related increases in ad inventory.
Also true, national brands are moving toward local marketing. According to a Balihoo study, 47.3% of national brands expect to spend more on local marketing in 2013 than they did in 2012, and mobile marketing leads among the types they’d like to add (currently used by 32%, with 35.4% planning to add it).
- According to BIA/Kelsey, growth in overall local media advertising (from $132.7 billion in 2011 to $147.1 billion in 2016) will come entirely from the online and digital space. In fact, traditional local media revenues, estimated at $111.5 billion in 2011, are projected to drop to $109 billion in 2016, for a CAGR of -0.4%. By contrast, online and digital local media revenues will increase at a compound annual rate of 12.4%, from $21.2 billion last year to $38.1 billion in 2016.
- In terms of share of local media spend, traditional media will decline from 84% in 2011 to 74.1% in 2016, with online and digital media increasing from 16% to 25.9%.
About The Data: The BIA/Kelsey forecast is based on interviews and company reports, as well as on usage trends, mobile ad spending across various formats, consumer adoption patterns, advertiser penetration and ad performance measurements such as clickthrough and cost-per-click rates, and other benchmarks in online media. Data was vetted against aggregate revenues of top players in mobile ad segment (e.g., mobile ad networks). Traditional definitions of ad spending apply to this forecast; does not include marketing or promotional expenditures such as coupons.