There’s good news and bad news about the local advertising space.
The bad news is that according to the Kelsey Group and BIA Advisory Services, there will be less of a local advertising market in 2013 than there was in 2008.
How much less?
“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 firms predict a compound annual -1.4% overall growth rate, with the largest drop-off in local ad spending occurring in 2009.
Spending on traditional local media is forecast to fall from $141.3 billion in 2008 to barely over $112 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% of local ad spending will be digital, with dollars focused on Internet yellow pages, local search, e-mail marketing and other online tactics.
In 2013, the digital share will jump to over 22%, and might grow even higher.
“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.
One thing is certain—local online advertising is about to get a whole lot bigger.
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