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BIA Report: Local Online Ads to Grow at Faster Pace

3/20/2012 8:00 AM Eastern

Local online, Internet and digital advertising growth is expected to far outpace of traditional advertising over the next five years, according to a recent study by BIA Kelsey.
Overall local advertising revenue was about $132.8 billion in 2011, a decrease of 2.4% over the previous year, impacted by the economy. Because of that decline, BIA Kelsey is expecting local media will grow at a slower rate - about 2.6% compounded annually - and will not keep pace with the overall economy.
"In October, we projected the total of the U.S. local media market to be $135.9 billion in 2011," said Mark Fratrik, vice president and chief economist, BIA/Kelsey in a statement. "But we now expect it to be $132.8 billion. Based on the changes in our estimates going forward, we expect the overall local media market will grow a bit more slowly over the next five years."
Overall local ad revenue should rise to $151.3 billion by 2016, according to BIA.
BIA Kelsey predicts that the shift toward online and digital advertising will continue over the next five years, with online/Internet/digital rising at a 12.7% annual clip, reaching $38.5 billion by 2016. Traditional advertising will grow at a 0.2% clip, rising from $111.5 billion in 2011 to $112.7 billion in 2016.

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