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Local Advertising to Go Programmatic

Programmatic to more than double share of local digital ad spending this year

May 6, 2015

What’s up with local advertising? Programmatic spending, based on data released in April 2015 by Borrell Associates. The firm estimated that programmatic’s share of local digital ad spend in the US would more than double this year, from 4.7% to 10%, or $5 billion. By 2019, 61% of local digital ad spending, or $47 billion, was expected to be conducted programmatically.

US Local Programmatic Ad Spending, 2015 & 2019 (billions and CAGR)

Borrell found that currently, local publishers were most likely to sell between 11% and 30% of their online ad inventory through programmatic channels, cited by 25%, while 23% sold more than 31% and 21% sold 10% or less. Just over three in 10 did not use programmatic advertising.

Higher adoption of local programmatic comes with concerns, though. Top worries revolved around commoditizing the product (34%), a lack of experience (33%) and undermining direct sales relationships (30%).

Mobile is also gaining ground among local advertisers. Estimates released in April by BIA/Kelsey forecast that after an increase of 76% last year, local mobile ad spending in the US would rise 55.8% this year, from $4.3 billion to $6.7 billion. By 2019, this was expected to reach $18.2 billion. Between this year and 2019, mobile’s share of local ad budgets was forecast to rise from 4.8% to 11.5%—making it the fourth-largest local media behind direct mail (23.6%), over-the-air TV (13.7%) and pure play online (12.9%).

As both programmatic and mobile ad spending expand their reach among local advertisers, the two will likely intersect. eMarketer estimates that US mobile programmatic display ad spending will rise 88.4% this year to $8.36 billion. Next year, this figure will leap another 69.2% to $14.15 billion.

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