Digital Advertising Set to Capture More Local Advertising Spend
Traditional advertising – including print, radio and TV – still accounts for the lion’s share of local advertising budgets, but digital advertising will continue to capture more market share through 2017 and beyond. Local advertising is barely expected to grow this year, with a slight contraction in traditional advertising, cancelled out by growing online budgets. The news will mean more revenue for businesses such as Google, Yahoo, Microsoft and Facebook, which will inevitably capture more market share as budgets move online. “According to BIA/Kelsey’s March 2013 forecast of US local media ad spending, the role of digital in the local ad market will continue to expand. BIA/Kelsey expects total local spending to reach $132.7 billion this year, essentially flat relative to 2012, when it was $132.5 billion,” writes eMarketer . “The composition of that spending will shift, however, as traditional spending declines from $109.4 billion to $107 billion in 2013 and digital spending increases from $23 billion to $25.7 billion.” BIA/Kelsey expects overall local ad spending to start growing again. Digital will continue to be a larger part of the overall composition of ad sales, meaning that its growth rates will have a more pronounced impact on the overall health of the local advertising market. Traditional advertising will bottom at $106.4 billion in 2015, before growing in 2016 and falling back to $107.6 billion in 2017. “We are seeing strong growth in the local business ad space, with money coming out of TV and print and moving online,” explains Yellow Pages United, the company behind the YPU blog . “Businesses are getting a taste for results-driven marketing, and they are realizing that they are never going to achieve the same return on investment from their offline activities.” The local advertising space is taking longer to transition to digital than other forms of advertising. The report by BIA/Kelsey estimates that the overall industry is currently spending around 5% more on digital advertising than local advertisers, but this gap will shrink as we move closer towards 2017. Digit advertising will account for 27.6% of all local ad spending by 2017, and the overall industry will be spending around 29.1%. Local advertisers are currently spending money on search ads, social media marketing and Yellow Pages advertising. They are capturing demand and seeing a strong ROI, but they have yet to make significant inroads into generating demand from display. Into the future, we should expect local advertisers to spend more money on display as self-servicing ad buying platforms grow. Most media businesses still run a very hands-on ad buying process, which means that they find it difficult to extract margin from local advertisers who typically have smaller budgets, and only want impressions from within a close geographical proximity of their premises. Publishers like the New York Times and Yahoo struggle to profitably service this demographic, but we should look out for more players to emerge in the display space. There are already many aggregation players, including Google, but none have yet to attract sufficient interest from local businesses. Digital Advertising Set to Capture More Local Advertising Spend is a post from: Daily World Buzz
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Digital Advertising Set to Capture More Local Advertising Spend
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on August 6, 2013. Filed under