TV Advertising to Remain Strong in Local Markets

TV media companies have it somewhat easier than competitors that have been relying on print newspaper and magazines or radio for their revenue. For the most part, advertisers are still saying they want TV ads to be a major part of their campaigns. But the fragmentation of the TV audience across devices is making the media-​buying process more complicated, especially in the local market.

BIA/​Kelsey analysts point out that the over-​the-​air TV market has rebounded nicely since the recession. And, as widely reported elsewhere, revenues will be driven up by political campaigns this year. Last year, local stations recorded $17.9 billion in the over-​the-​air sector. This year, the industry total, which includes digital, will reach $20.3  billion. The digital component, which was worth $535 million in 2011, could be as much as $635 million in 2012 if sales increase again by 18.7% as they did last year.
In considering the entire local advertising market, which BIA/​Kelsey values at $132.8 billion, 13.9% of all marketer spending went to TV in 2011. By 2016, TV will still be strong as the following percentages show:

  • Direct mail 27.6%
  • TV 14.3%
  • Newspapers 13.2%
  • Radio 11.7%
  • Online 10.7%
  • Out of home 6.2%
  • Cable 5.2%
  • Yellow pages 4.7%
  • ERPM (email and reputation management) 1.7%
  • Magazine 2.1%
  • Mobile 2.7%

Looking forward, analysts expect that local digital TV revenue will reach $1 billion in 2016 while the over-​the-​air component will be worth $22.8 billion – exactly where it was in 2006. This fact reflects that local TV has many more formats to compete against than it did 10 years ago. For now, revenue is headed in the right direction, but media sales reps will be working harder to sell their ad space on a variety of platforms as local marketers make the move to digital.

[Source: Local TV Revenues. BIA/Kelsey.com. 1 May 2012. Web. 17 May 2012] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.