BIA/Kesley: Direct Mail Remains Dominant Local Ad Market Format

Thu Jul 20, 2017

Kathy Crosett

With the first half of the year behind us, research shops are taking a look at their ad projections for 2017. BIA/Kelsey has mailjust issued its mid-year forecast. The firm’s analysts anticipate slightly less ad spending than they had originally forecast. Here are the details regarding local market ad spending.

The new numbers from BIA/Kelsey indicate that local ad spending will come in at $147.9 billion, instead of $148.8 billion. The downward adjustment of nearly $1 billion is tied to a ‘weaker economy.’ For the longer term, analysts still expect strength in the local ad market, with CAGRs of 3.8% between this year and 2021. That growth will bring the ad market to $174 billion in 2021. In BIA/Kelsey’s terms, the local ad market consists of spending by local businesses and by bigger marketers that are eager to reach shoppers at the local level.

The growth in the local ad market will stem directly from spending on digital and mobile. With expected CAGRs of 11.9%, these formats will outpace the original estimates BIA/Kelsey made in forecasts that cover the period between 2017 and 2021.

Here are the top five formats marketers will be spending on in the local ad market this year. Note that the projections for TV, radio and newspaper include both traditional and digital ad buys.

  • Local TV $20.9 billion (14%)
  • Direct mail $37 billion (25%)
  • Newspaper $16 billion (11%)
  • Online $18.6 billion (11%)
  • Mobile $16 billion (11%)

In a big shift, online ad spending has surpassed radio in local market activity this year. BIA/Kelsey expects radio to come in with 10.5% of total spending for 2017. By 2021, that share will likely drop to 9.7%.

BIA/Kelsey chief economist Mark Fratrik says, “Although national and local businesses still utilize a mix of digital and traditional advertising platforms, the opportunities afforded by mobile, social and video advertising are incredibly valuable due to their measurability, adoption by consumers and enhancements by technologies such as beacons and data attribution that blend extraordinarily well with today’s mobile consumer.”

While direct mail remains the go-to format for advertisers in the local market, businesses are also increasingly interested in digital.


You May Also Like...

, , , ,

About Kathy Crosett

Kathy is the Research Director 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.

View all posts by Kathy Crosett