Posted February 22, 2010 9:09 am by with 3 comments

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Advertising in general has had a soul crushing last couple of years. That’s not a surprise. Combine the rapid changes to how everyone communicates with the worst economy in quite some time and you have the perfect storm for advertising woes. The ones who have the greatest difficulty in these times are the local advertisers because they have limited cash flow and limited ability to keep up with rapid change.

Hopefully there is an end to this cycle sooner than later. A study conducted by BIA/Kelsey sees the rebound in local advertising overall but more importantly a significant shift to digital which could account for 25% of local ad spend by 2014. ClickZ gives us some more to consider

The findings, reported in BIA/Kelsey’s “U.S. Local Media Annual Forecast,” did not surprise BIA/Kelsey President Neal Polachek, who said the recession and lingering economic doldrums have “triggered a more rapid switch to online digital stuff.” Even though companies are increasingly embracing digital media for local advertising, online/interactive was not immune to the recession’s ravages. BIA/Kelsey said there was a slowdown in the growth rate for digital, including search, display and classifieds, but it predicted that digital – now about 14 percent of total local ad spend – will encompass 25 percent by 2014.

I don’t know about you but I really appreciate Mr. Polachek’s technical terminology referring to “online digital stuff”. In the process of becoming 25% of all local advertising spend in the next few years digital spend will grow by 2.5 times to total $37 billion annually. Not a small number for sure.

Now, we have historically been skeptical of research here at Marketing Pilgrim. We always look for the angle as to why anyone would promote certain findings. Polachek further postulates on the impact of mobile by saying

Polachek said a key factor in the local ad market during the next five years will be mobile. However, he said predicting the scope of mobile’s impact is not easy. “I think one of key drivers during the next four or five years will be the phone and how the mobile piece transforms all this,” he said.

Not earth shattering, I admit. What he said next though will get some MP props because I have not heard this much from the research community.

“I don’t think any analyst out there, ourselves included, really knows what will happen.”

Please put up the applause sign for Mr. Polachek! Every other research report is positioned as if it came off a mountain in the form of tablets and should be taken as the truth because, well, the researcher said so. At least this research group has the stones to admit that looking into a crystal ball regarding where any of this goes is probably the least exact science there is.

So how do you view local advertising? Do you think that there will still be just a 25/75 split with online and traditional in 5 years or will online advertising take up more of that pie?

Given the dearth of news to start the week you should have time to comment.

  • 25% / 75% — That’s a tough call.

    Safer to say the traditional media outlets will focus on developing the digital products their local advertisers are demanding. I’m curious to see how successful businesses like local newspapers are at convincing customers to up spend with more digital products (likely to include websites and social media marketing along with inserts and flyers).

    What we all know for certain is we don’t really know how, when or if local ad spend will bounce back. That said, it’s an exciting time to be on the digital side of things with so many businesses keen to brand themselves online and learn how to use social media more effectively.
    .-= Social Media Commando´s last blog ..Social Media Networking: Your Dream Job Awaits =-.

  • John Pereless

    John Pereless President of Pereless Graphics Company supports the promotion
    of Products made in the USA .

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