Technology | Media | Telecommunications

Saturday, April 04, 2009

Ups and Downs of Local Advertising in U.S.


Local advertising in the U.S. is in for a big change, according to the latest overall industry assessment by eMarketer. The bad news, according to the Kelsey Group and BIA Advisory Services, is that there will be a decline in the local advertising market in 2013 when compared to 2008.

"By the end of the forecast period, the overall size of the local advertising market will be considerably smaller than it was at the end of 2008," said Tom Buono of BIA. The research firms predict a negative compound annual -1.4 percent overall growth rate, with the largest drop-off in local ad spending occurring this year.

Spending on traditional local media is forecast to dramatically fall from $141.3 billion in 2008 to barely over $112 billion in 2013.

The good news is that the local online ad market is growing, and will continue to make up a larger percentage of the local advertising sector. In 2009, nearly 12 percent of local ad spending will be digital, with dollars focused on Internet yellow pages, local search, e-mail marketing and other legacy online marketing tactics.

In 2013, the digital share will increase to over 22 percent, and might grow even higher if local businesses still believe that advertising is a good investment -- when compared to lower-cost marketing alternatives, such as online social media self-publication.

"The share shift we expect between traditional and digital could actually be more pronounced if the major traditional media are not able to integrate new interactive products into their bundle," said Neal Polachek of Kelsey.

Printed Yellow Pages are likely to suffer some of the worst declines. However, this format is still effective at reaching retired seniors that don't go online, and low income households. Otherwise, telephone directories will increasingly go straight to landfills or be recycled as soon as they're delivered to consumers.