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Local Ad Revenues Expected to grow 3.75%

Local advertising revenues in the U.S. are expected to reach $146 billion in 2016, up 3.75% from $141.3 billion in 2015, according to a new forecast by BIA/Kelsey.

Online and digital revenues well grow 12% to $42.6 billion and represent 29.1% of total local media revenues.

By 2020, local advertising revenue will be $168.9 billion, according to the forecast.

“For 2016, we expect total local ad revenues to nudge upward, resulting from a slightly stronger U.S. economy and a substantial amount of political advertising,” said Mark Fratrik, chief economist, BIA/Kelsey. “We also adjusted our 2015 estimate for total local media spending up slightly due to stronger mobile and social advertising.”

BIA/Kelsey forecasts that traditional forms of advertising—including local TV advertising—will represent 70.9% of local ad revenues in 2016, down from 73.1% in 2015. The forecast calls for traditional advertising eroding to a 60.9% share in 2020, with online and digital growing to a 39.1% share.

“Mobile is the primary force behind the continuing increase in digital advertising, largely driven by social advertising,” explained Fratrik. “Mobile spending is growing faster than expected, cutting into the growth of other online advertising. For example, online spending on ads viewed through desktops is still increasing, but overall only at single digit growth rates as more of the attention of consumers and advertisers alike shifts to mobile. Local video spending on all platforms—mobile, online, TV over-the-air, cable and out of home—will grow, along with local video’s slice of the local advertising pie.”