Local Digital Marketing Dollars To Reach $71.6 Billion By 2020, Says BIA/Kelsey

Within four years, interactive will comprise 41.6 percent of total local media ad sales, up from 28 percent in 2015.

Growth in local online/digital ad dollars are looking more robust than previously predicted, says market analyst BIA/Kelsey in its latest spending forecast.

Digital marketing expenditures between 2015-2020 are expected to rise at a compound growth rate of 12.8 percent. At the same time, traditional advertising revenues will remain flat, BIA/Kelsey projects. Read the release.

Overall local ad dollars will hit $172.2 billion by 2020 for a decent annual gain of 4.2 percent — an improvement over BIA/Kelsey’s November 2015 call for 3.7 percent yearly increases.

In particular, local online/interactive/digital marketing dollars will be $71.6 billion, representing 41.6 percent of total local media advertising revenues, up from 28.0 percent in 2015.

Despite the continued shift to digital, Mark Fratrik, chief economist at BIA/Kelsey, offered some reassurance to offline channels.

“While digital’s impressive growth, driven by mobile and social, comes mainly at the expense of traditional print media, it’s important to note other traditional media segments are maintaining a position in the local marketplace,” said  Fratrik. “National and local businesses still utilize a mix of advertising platforms, comprised of digital and traditional formats, capitalizing on the strengths of various media to get the message out.”

US-Local-Advertising-Forecast-2016-Mid-Year-Update-InfographicThe primary spending drivers over digital across the board has been the acceleration of mobile marketing — largely due to Facebook’s and Google’s respectively aggressive efforts in that area — and social media. And the efficacy of mobile and social media spending is itself a product of the rise of location technology, which ensures a greater ability to reach people on-the-go and on their favorite media channels.

In its forecast last November, BIA/Kelsey said that geo-targeted mobile ad spending will leap 34.5 percent to $11.3 billion in 2016 from $8.4 billion in 2015.

“The ability to reach customers with an ad message when they’re within a two-block radius of your store is remarkable to local businesses developing their mobile ad strategy,”  Fratrik told GeoMarketing at the time. “They’re taking advantage of that.”

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David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.