Local Ad Spending to Shift Channels through 2015
At the recent ILM East conference in Boston, BIA/Kelsey analysts described how the local online and mobile ad formats will grow between now and 2015. Analysts argue these channels can handle what traditional media does – text, audio, video, voice and data. These effects will be especially impressive when the 4G wireless devices become more mainstream. In addition, implementing offerings in the online and mobile local world, for now, will be easier because there are few barriers to entry. Competitors in these fields do not have huge regulatory barriers and they do not face expensive investments in physical printing plants.
The way BIA/Kelsey analysts see it, total advertising spending will rise from $136 billion (2010) to $153.6 billion in 2015. The figures below compare the share of local advertising by channel in 2010 and 2015 (in parentheses).
- Direct mail 28.2% (26.9%)
- Newspaper 19.1% (12.9%)
- TV 14.6% (13.3%)
- Radio 10.6% (11.7%)
- Print YP 6.4% (4.0%)
- Internet YP 1.3% (2.4%)
- OOH 4.9% (6.1%)
- Cable 4.4% (5.1%)
- Magazine 2.4% (2.0%)
- Online/interactive 6.8% (10.4%)
- ERPM 0.8% (3.3%) (email, online reputation and presence management)
- Mobile 0.3% (1.8%)
Based on these figures, newspapers, TV, direct mail and print yellow pages will all see their market share shrink as online formats jump. A huge increase is expected in the ERPM category, based on marketer need for online reputation and presence management.
But not all industries will make seismic shifts to their media mix between now and 2014. A look at projected changes in spending in the automotive channel show an industry that is slowly changing. The actual spending by media format (2010) appears below and projected 2014 expenditures appear in parentheses.
- Direct mail 15.8% (15.8%)
- Newspaper 20.9% (20.9%)
- TV 24.8% (26.5%)
- Radio 10.1% (9.8%)
- Print YP 4.0% (3.1%)
- Internet YP 0.6% (1.2%)
- OOH 2.1% (2.6%)
- Cable 5.3% (6.1%)
- Magazine 3.0% (2.8%)
- Online/interactive 6.1% (8.8%)
- ERPM 0.4% (1.5%) (email, online reputation and presence management)
- Mobile 0.2% (1.0%)
In the automotive industry, TV will increase its market share through 2014 while radio and print YP will yield market share to online, ERPM and mobile. Media companies who have not yet looked into how to digitize offerings will likely be making changes in the next 2-3 years but they should also realize that each industry may adopt a different timetable for making the shift to mobile and other new forms of media.