Local Ad Revenues To Hit $148 Billion In 2017
Consumers' increased willingness to share their location data is bolstering growth in the space.
Total local ad revenues will reach $148.8 billion in 2017, up 2.4 percent from 2016, according to BIA/Kelsey’s five-year local advertising forecast.
The growth reflects continued investment in reaching consumers with mobile ads, as the ever-present smartphone has largely become the “first screen” — but it also indicates that retailers are catching up to the idea that mobile ads are most effective at driving foot traffic when they are tied to a consumers’ location.
Marketers are increasingly able to target consumers based on their location — and later, measure and attribute their store visits — thanks to an uptick in location data inventory. As we wrote last week, apps that use location as a core component of the experience are changing consumer behavior around sharing their data. Take, for example, the mold-breaking Pokémon Go: By the end of July 2016, the app had a reported 25 million users in the U.S. sharing their real-time location. Now, the onslaught of data is greater than ever — though it’s up to marketers to rely on first party data and to ask the right questions in order to make sure that quality remains high.
Essentially, the continued massive growth in the local ad space is attributable to this mix of factors: Mobile’s ever-increasing dominance means marketers must continue to invest in mobile ads, and because mobile is inherently local — consumers carry their devices with them at all times, and use them to search for products and people nearby in their community — marketers are beginning to understand that customizing their campaigns on the local and hyperlocal level is key to capturing consumer attention in real-time.
“A range of factors will drive local ad revenues higher in 2017 and through the end of the next year,” said Mark Fratrik, SVP and chief economist at BIA/Kelsey, in a statement. “[These include] increased spending by national brands in local media channels, extraordinary growth in mobile and social advertising, and the continued expansion and selection of online/digital advertising platforms. In fact, we are predicting that online/digital local ad share will exceed the share of print media by 2018.”