Local Online/Interactive Advertising Revenues to Approach $18 Billion by 2017

Today, BIA/Kelsey released its latest U.S. Local Media Forecast, with local advertising revenues growing from nearly $133 billion in 2012 to nearly $152 billion by 2017 , driven by a $21.4 billion surge in digital/online advertising over the same period (from $23.1 billion to $44.5 billion, a compound annual growth rate of 14 percent). Online/interactive – consisting of search, display and classified/IYP/vertical markets – is a $10.8 billion market in 2012, or nearly 47 percent of all digital revenues. By 2017, the online/interactive total grows to $17.7 billion.

The local search market will expand from $6.0 billion to $8.6 billion during this five-year period, accelerating at a faster pace than the aggregate U.S. search market. Mobile-local search is a critical growth driver as users leverage their devices to make local decisions, and geo-targeted messages surface against these queries. Desktop search volume continues to rise as well, though, largely a product of rising tablet adoption and surging vertical search on specialized, category-specific sites (auto, jobs, etc.).

Local display, which includes social media advertising, remains smaller than search. However, the sector is growing more quickly, from $2.9 billion to $5.7 billion during the five-year curve. The primary growth drivers are social and video display, both of which are seeing expanded inventory and improving CPM rates.

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