SMBs in the entertainment vertical love video advertising. We’re talking movie theaters, event venues, catering, on-demand performers*, etc.. As is conducive to their craft, they’re big fans of online video, particularly website and YouTube videos. They’re also big on cable and broadcast TV.

This is according to BIA/Kelsey’s latest cut of SMB survey data (information below). On average, these Entertainment SMBs spend 12 percent of ad budget on video, much more than overall SMBs. When applied to their high ad spending, this notably produces an average annual video spend of $4,000.

This class of SMBs are also heavy users of social media of all types, and have a high interest level in advertising and marketing services. This is the wrap: Entertainment SMBs are good prospects for video and social media products. They use a lot, spend a lot, and they have their antennas out.

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These were a few of the top-level findings of the latest cut of LCM 18, focusing on SMBs in the Entertainment vertical. Clients of BIA/Kelsey can access this report through our client portal. The report is also available for purchase, and more information on the LCM survey is here.

*SMBs in Entertainment is a roll-up category that includes: Restaurants, Bars, Hospitality (Catering/Hotel), Music, and Entertainment – miscellaneous.

The post Entertainment Value: SMBs Have it Too appeared first on BIA/Kelsey - Local Media Watch.

Automotive will drive $15.13 billion in local advertising in 2015. That’s according to BIA/Kelsey’s 2015 Insights into Local Advertising report released today.

The Automotive industry, which has returned to strong growth on improved economic conditions, low fuel prices and the largely unanticipated transportation needs of Millennials, who have become the largest car-buying generational cadre in the past year. We project the segment will continue to grow at a three-percent compound annual rate through 2019.

The Automotive category includes: 1. Auto dealers & manufacturers 2. Other motor vehicle dealers 3. Auto parts & accessory stores 4. Tire dealers 5. Gas stations & auto repair. Collectively, these auto segments account for 11.1 percent of all local advertising in the United States.

Car and light-truck advertising remains heavily dependent on television advertising, with 33.9 percent of local ad spend going to television. However, digital advertising is the sole growth category in automotive, increasing by 12 percent annually. BIA/Kelsey estimates that digital, which represented $2.78 billion in local spending in 2015, will account for 30 percent of automotive advertising by 2019. All of the anticipated $2.3 billion in market growth over the next five years will come in digital channels.

The report also examines the growing importance of Millennials to automotive industry growth, despite their long-reported indifference to driving. As they age into parenthood, Millennials are buying more cars than any other generation and can be expected to drive the industry’s transition to low- or no-carbon emissions and digital in-car entertainment and marketing.

“The auto industry and television came of age together as keystones of Twentieth-Century American culture,” said Dr. Mark Fratrik, report co-author, senior vice president and chief economist at BIA/Kelsey. “The two industries remain closely tied, with the auto industry being dependent on over-the-air television advertising, and all auto vertical subcategories relying heavily on traditional media to get their message to their audience. Looking forward though, digital is going to be very important by 2019, representing nearly one-third of automotive local ad spending.”

We also offer our guidance on preparing to use vehicle-generated data and in-dash displays, mobile and PC marketing, which will be responsible for much of the digital growth as the fleet turns over to a generation of digital-enabled cars and trucks. Location, personalization and programmatic advertising will be critical to connecting the in-car experience to marketing messages.

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The report is available for purchase in the BIA/Kelsey store. Advisory clients with portal access can login to download the report.

The post Digital Automotive Advertising Drives $15B in 2015 Local Revenues appeared first on BIA/Kelsey - Local Media Watch.

Local ad spending reached $137.9 billion in 2014, and will see a slight boost to $139.4 billion in 2015. We talked with BIA/Kelsey Chief Economist and SVP Mark Fratrik about the new research (interview below).

Every year, BIA/Kelsey issues a five-year forecast on local spending in the fall, and then updates it in the following spring based on full year reporting, current trends and anticipated events.

This year’s update shows more spending than originally forecast in 2014, and modest increases in our 2015 given several factors, including a rapid rise in mobile spending.

BIA/Kelsey: We’re seeing a slight uptick from our original forecasts for 2014-2015. What’s driving that?

Mark Fratrik: Local TV spending was stronger in 2014 than we predicted, primarily due to political advertising from many Senate, House and gubernatorial races. And television still drives local political spending, even though its overall growth rates are much lower than online. Television growth rates average 3-4 percent. Online growth is always in double digits, but starts at a much smaller base. To be sure, we aren’t downplaying the shift from traditional advertising to more digital/online/mobile outlets. These new media provide a more focused and efficient advertising vehicle for national and local advertisers to reach their audiences. The shift is especially felt in traditional print outlets, such as newspapers.

BIA/Kelsey: Hundreds of millions of dollars, if not billions, are being raised for the next presidential election. Won’t that drive spending with local television outlets?

Mark Fratrik: We should see an amazing amount of spending coming up in late 2015 into early 2016-15. With a tightly competitive Presidential race on the Republican side, it won’t just be in the early stats of Iowa, New Hampshire, Nevada and South Carolina. And we want to make the point again about online and digital. While political campaigns are increasingly using digital outlets, local TV and cable still see a much larger part of that spending. They’re an important part of that message building.

BIA/Kelsey: The big new local channel is mobile. We see how the Internet pure plays like Google, Facebook and Yahoo are reporting that mobile revenues are moving towards parity with other digital advertising.

Mark Fratrik: Mobile is driving most of the change in the digital space, gaining traction with advertisers, and jumping to an 11.5 percent share of the media pie by 2019 from 3.1 percent a year ago. We are constantly updating and increasing our estimates for mobile spending . By 2019, it will be the fourth highest channel for local media spending in terms of share. Mobile is also driving our increased forecast for social media spending, which will grow by almost 1/3, or 31 percent.

BIA/Kelsey: We’re seeing a lot of activity for digital audio services like Pandora, I Heart Radio and Spotify. How much will they impact local spending, and especially, traditional radio?

Mark Fratrik: Radio is a good illustration of the gap between digital and traditional media revenues. Take Pandora. It will generate nearly $153 million in 2014 in local advertising revenue, which represents really healthy growth. But that is just $153 million of $139 billion in local media spending. And it is only in the Top 50 markets. Conversely, Radio stations continuously to basically hold its own with $14.4 billion in over-the-air advertising spending in 2015, or 10.3 percent.

Chief Economist and SVP Mark Fratrik

The post $139 Billion in Local Ads: The Word with BIA/Kelsey Chief Economist Mark Fratrik appeared first on BIA/Kelsey - Local Media Watch.

This is the first post in our new series, Vantage Points. On a semi-weekly basis, it will tap the perspectives of various lookout points from around the local media and tech sectors. Though the format, frequency and distribution will develop, please contact mbolandATbiakelsey if you have insights to share. The views expressed within do not necessarily reflect those of BIA/Kelsey.

In Broadcast Media, Legacy Doesn’t Have to Carry a Curse

By Maribeth Papuga

“We didn’t reinvent the circus: we packaged it in a much more modern way, but basically we took an art form which is known,with a lot of dust on it, where people had basically forgot that it could be something else than what they knew about, and we basically organized for ourselves a creative platform.” — Cirque de Soleil founder Guy Laliberté, 2011

Challenged by an industry that is rewriting the rules while the ecosystem expands, local legacy media must repackage itself in a more modern way. Like other industries, traditional processes and procedures prevail for lack of any viable and collective alternative. Local market broadcast stations have the further burden of regulatory and content restrictions that create complacency and aversion to alter predictable models.

These stations have faced fiscal and competitive entertainment challenges for decades with focused response on improving structural attractiveness through mergers and acquisitions; but long term growth models are dependent on a structure and culture of vertical integrations, hierarchical decision making and risk aversion. Real and substantial opportunities will not prevail unless broader entrepreneurial thought leadership, an open and inclusive business environment and a willingness to shift direction is adopted by all.

Rather than react to headlines or seek answers in a homogenized national marketplace, local broadcasters should concentrate on disrupters in their own markets and their impact on local consumers. These startups create new products and services by thinking unconventionally and expanding their ability to solve problems. With better access to locally sourced data, economic development and demographic shifts taking place in local markets it is unfathomable that the solutions would not come from these centers versus a national aggregator. And yet, this is precisely a direction that many leaders are headed by following nationally driven initiatives.

Its time legacy media concentrate on challenging traditional models, expanding collaborative partnerships and using academia as a key lever for innovation and talent.

Take the Lead

Today’s media environment is flush with new products that elicit both consumer and marketing adoption in lieu of legacy options. This reality has forced traditional owners to find ways to mimic these new offerings with incomparable options by adopting tactics related to impressions and programmatic selling; without fully understanding that the underlying framework will not only make this a difficult comparison but take them further away from the core value they offer their audiences, advertisers and investors.

Think Horizontally

The economics of managing change in today’s divergent marketplace will not enable any one company or channel to create an all-inclusive model. By adopting the practices set forth by local mayors and business development teams through collective problem solving among civic, private, academic and philanthropic resources; broadcasters can build bridges to connect multiple parties to identify shared resources that collectively address their unique market circumstances and promote broader solutions. Underlying these new initiatives is a framework for prosperity that is collaborative, entrepreneurial and network based to drive future focused initiatives Through a more collaborative market structure, legacy media owners can better avail themselves to both nurture and develop a stronger playbook for the future.

Back to School

The role of universities has been significant in feeding broadcast owners talent needs for decades. As technology evolves, the journalism and engineering students are migrating toward new options that appeal to their future forward goals. Much of this interest is born through on campus experience as universities promote inclusive entrepreneurial thought leadership across departments and majors. Legacy vendors should look to universities as the resource lever to help develop and launch innovative solutions against market objectives for more future forward growth targets. Tapping universities in a more disciplined way can foster faster development of new models and solutions to audience measurement, content relevance, device affinity and the interactive value in the local market.

Redefine the Market

A new media ecosystem fueled by entrepreneurial values, new tactics and rules has forced legacy media to become more defensive by following incomparable trends. While entrepreneurial ecosystems take time to develop, that is no reason to retain vertical industry decision making weighted toward an aggregated solution. People live in local markets and legacy media leaders still service these individuals in their own backyard. By following a simple truth that enables the market and its audiences to be the leading source for innovative solutions, the sum of these individual efforts will open up far more possibilities for future growth. If not, legacy leaders could risk further redundancy among consumers, advertisers and investors.

Maribeth Papuga is a 25+ year advertising veteran with specialization in local market media planning and buying. The majority was spent leading the local practice at MediaVest and predecessor DMB&B.

The post Vantage Points: “Legacy” Shouldn’t be a Bad Word appeared first on BIA/Kelsey - Local Media Watch.

This is the first post in our new series, Vantage Points. On a semi-weekly basis, it will tap the perspectives of various lookout points from around the local media and tech sectors. Though the format, frequency and distribution will develop, please contact mbolandATbiakelsey if you have insights to share. The views expressed within do not necessarily reflect those of BIA/Kelsey.

In Broadcast Media, Legacy Doesn’t Have to Carry a Curse

By Maribeth Papuga

“We didn’t reinvent the circus: we packaged it in a much more modern way, but basically we took an art form which is known,with a lot of dust on it, where people had basically forgot that it could be something else than what they knew about, and we basically organized for ourselves a creative platform.” — Cirque de Soleil founder Guy Laliberté, 2011

Challenged by an industry that is rewriting the rules while the ecosystem expands, local legacy media must repackage itself in a more modern way. Like other industries, traditional processes and procedures prevail for lack of any viable and collective alternative. Local market broadcast stations have the further burden of regulatory and content restrictions that create complacency and aversion to alter predictable models.

These stations have faced fiscal and competitive entertainment challenges for decades with focused response on improving structural attractiveness through mergers and acquisitions; but long term growth models are dependent on a structure and culture of vertical integrations, hierarchical decision making and risk aversion. Real and substantial opportunities will not prevail unless broader entrepreneurial thought leadership, an open and inclusive business environment and a willingness to shift direction is adopted by all.

Rather than react to headlines or seek answers in a homogenized national marketplace, local broadcasters should concentrate on disrupters in their own markets and their impact on local consumers. These startups create new products and services by thinking unconventionally and expanding their ability to solve problems. With better access to locally sourced data, economic development and demographic shifts taking place in local markets it is unfathomable that the solutions would not come from these centers versus a national aggregator. And yet, this is precisely a direction that many leaders are headed by following nationally driven initiatives.

Its time legacy media concentrate on challenging traditional models, expanding collaborative partnerships and using academia as a key lever for innovation and talent.

Take the Lead

Today’s media environment is flush with new products that elicit both consumer and marketing adoption in lieu of legacy options. This reality has forced traditional owners to find ways to mimic these new offerings with incomparable options by adopting tactics related to impressions and programmatic selling; without fully understanding that the underlying framework will not only make this a difficult comparison but take them further away from the core value they offer their audiences, advertisers and investors.

Think Horizontally

The economics of managing change in today’s divergent marketplace will not enable any one company or channel to create an all-inclusive model. By adopting the practices set forth by local mayors and business development teams through collective problem solving among civic, private, academic and philanthropic resources; broadcasters can build bridges to connect multiple parties to identify shared resources that collectively address their unique market circumstances and promote broader solutions. Underlying these new initiatives is a framework for prosperity that is collaborative, entrepreneurial and network based to drive future focused initiatives Through a more collaborative market structure, legacy media owners can better avail themselves to both nurture and develop a stronger playbook for the future.

Back to School

The role of universities has been significant in feeding broadcast owners talent needs for decades. As technology evolves, the journalism and engineering students are migrating toward new options that appeal to their future forward goals. Much of this interest is born through on campus experience as universities promote inclusive entrepreneurial thought leadership across departments and majors. Legacy vendors should look to universities as the resource lever to help develop and launch innovative solutions against market objectives for more future forward growth targets. Tapping universities in a more disciplined way can foster faster development of new models and solutions to audience measurement, content relevance, device affinity and the interactive value in the local market.

Redefine the Market

A new media ecosystem fueled by entrepreneurial values, new tactics and rules has forced legacy media to become more defensive by following incomparable trends. While entrepreneurial ecosystems take time to develop, that is no reason to retain vertical industry decision making weighted toward an aggregated solution. People live in local markets and legacy media leaders still service these individuals in their own backyard. By following a simple truth that enables the market and its audiences to be the leading source for innovative solutions, the sum of these individual efforts will open up far more possibilities for future growth. If not, legacy leaders could risk further redundancy among consumers, advertisers and investors.

Maribeth Papuga is a 25+ year advertising veteran with specialization in local market media planning and buying. The majority was spent leading the local practice at MediaVest and predecessor DMB&B.

The post Vantage Points: "Legacy" Shouldn't be a Bad Word appeared first on BIA/Kelsey - Local Media Watch.

Interestingly, traditional local media has a disproportionate share of 2015 spending (87.2 percent). Yet, the online/digital local will grow substantially in the next few years, reaching 20 percent by 2019. This online/digital will be with pure plays, as well as the traditional media that have expanded their services and see the opportunities with this group of advertisers. These health care providers will be extremely interested in greater integration of digital marketing services.

More information on this vertical advertising spending is now available in the recently released report, Insights in Local Advertising – Health Care Vertical, which examines traditional and digital spending trends, profiles the market ad share by media, and details the advertising trends of small and medium-sized businesses (SMBs).

To read the executive summary of this report, just click on “Insights in Local Advertising – Health Care Vertical.“

The post Health Care Vertical – Important to Understand for All Local Media appeared first on BIA/Kelsey - Local Media Watch.

The Google Fiber Team announced that it will be launching a trial of local television ads as part of its Google Fiber service in Kansas City, MO and Kansas City, KS. The locally targeted ads will appear “during existing ad breaks, along with national ads, on live TV and DVR related programs.”

The Google Fiber TV ads will be delivered in real time and will be matched to households based on factors including geography, type of program shown and viewing history. Viewers will be allowed to opt out of seeing ads.

Google says that local advertisers on the Google Fiber service will only pay for ads that run and they can limit the number of times an ad is shown to a particular TV set.

The post Google Fiber Testing Local TV Ads in Kansas City appeared first on BIA/Kelsey - Local Media Watch.

To effectively compete in this new marketplace, broadcasters must first discover the extent of this marketplace. Specifically, they need to know the size of the advertising spending that is moving to the digital advertising options. The latest BIA/Kelsey national advertising forecast predicts that by 2018 over a third of all local advertising will be digital. They also need to know locally what spending is moving to digital by different business categories, information that is available through BIA/Kelsey’s Media Ad View Plus forecast.

While a considerable amount of that increased digital spending is with pure-play online companies, radio and television stations are increasingly becoming a part of that spending. These local media outlets have the benefits of a local brand image, news and information on the local market, and, a local sales force – “boots on the ground.”

These advantages allow these local stations to move into new areas, and even go beyond just selling related online advertising on their station websites. Several broadcasters have moved into a “digital agency” role with their local businesses, providing needed guidance to local businesses who are overwhelmed with so many new and different choices. Of course, local broadcasters are not the only local media that are trying to fill this role, so these broadcasters need to have well-trained staffs knowledgeable about all of the opportunities out there.

In addition, these broadcasters need to insure that their social and mobile presence is strong. Many Texas broadcasters are doing just that with their on air personalities heavily involved and their news and information available on many different devices.

It was illuminating and encouraging at the same time presenting this information to these Texas broadcasters as many in the audience indicated that they were well on their way to transition their efforts to take advantage of these new opportunities.

The post Broadcasters Moving Digitally appeared first on BIA/Kelsey - Local Media Watch.

Video is quickly becoming one of the most transformative areas in digital tech & media. It’s right up there with mobile and social media. In fact, its quickly colliding with both of those areas as underlying mobile technology and social behavior compel new formats like Vine and Instagram Video.

That’s just the tip of the iceberg. How are video business models forming? How are the traditional owners of video production and distribution evolving in such a quickly changing environment? And what does it mean for local video and other important areas like video ad sales?

BIA/Kelsey analyst and Managing Director Rick Ducey is tracking these areas pretty closely and I recently got the chance to pick his brain on a few topics. One theme that seemed to thread throughout these sub-topics is video’s tipping point: Where and when will it happen? The Q&A with Ducey is below.

Q: How is the macro environment changing for video consumption patterns, and what does that mean for those in the business of delivering and monetizing video?

A: The TV Everywhere authentication model used by cable operators is a bit clunky in terms of the user experience but it has value. Netflix is teaching us the “binge viewing” paradigm of releasing an original series all at once. Letting viewers connect to “their” content on various devices and networks is huge. But we need better content discovery across platforms like linear television, VOD, DVR, Internet, and OTT services like Netflix and Hulu. A seamless and powerful interface with a solid business model can drive a lot of change fast. Everybody from Intel, Google, Apple, Tivo, cable MSOs to Amazon and others have their toes in this water.

Q: Mobile technology and behavior is also creating a multi-screen world. What challenges does mobile present for video delivery and monetization?

A: As consumers adopt multi-screen behaviors, programmers and advertisers will follow. For example, ESPN research shows viewers consume ESPN content across an average of four screens. The tipping point will come with the ability to plan, execute and attribute ROI across screens. This involves the transactional platforms that brands and video publishers use; measurement and reporting systems; optimized creative for different screens; and the complementary effect of cross-screen campaigns (we know that broadcast plus mobile video campaigns drive more lift). And it’s not just screens, mobile is such a killer in this category in terms of growth potential, it gets to measuring and attributing user targeting and behavior inside mobile apps since that’s where a lot of traction and engagement occurs.

Q: Drilling down to local, What are some of the ways that Local Television is adapting to today’s changing video environment?

A: Most video advertising is on broadcast television. National spot advertising is sold on Cost Per Point compared to the rest of the video world that is sold on a CPM basis. It’s sort of geeky, but it will be a potential large tipping point if spot TV converts to selling on CPM basis as it reduces a lot of friction in the buying process. We’re doing research on this point for the Television Bureau of Advertising. Of course local television is quite well monetized but another tipping point will come through driving more video monetization in other channels including desktop, tablet and mobile. Most video consumption is still plain old fashioned linear television.

Q: So how does all of this impact the entrenched ways that video ads are bought and sold?

A: Yes, interrelated to all of this is the way video is bought and sold. Often at agencies there are separate video and digital planning and buying teams. Same on the video side. When buying and selling is oriented to video — as a content type with different affinities and values on different screens — and that’s all plugged into pricing and attribution big data algorithms, we’re off and running.

The post Where is Video's Tipping Point?: A Conversation With BIA/Kelsey's Rick Ducey appeared first on BIA/Kelsey - Local Media Watch.

Video is quickly becoming one of the most transformative areas in digital tech & media. It’s right up there with mobile and social media. In fact, its quickly colliding with both of those areas as underlying mobile technology and social behavior compel new formats like Vine and Instagram Video.

That’s just the tip of the iceberg. How are video business models forming? How are the traditional owners of video production and distribution evolving in such a quickly changing environment? And what does it mean for local video and other important areas like video ad sales?

BIA/Kelsey analyst and Managing Director Rick Ducey is tracking these areas pretty closely and I recently got the chance to pick his brain on a few topics. One theme that seemed to thread throughout these sub-topics is video’s tipping point: Where and when will it happen? The Q&A with Ducey is below.

Q: How is the macro environment changing for video consumption patterns, and what does that mean for those in the business of delivering and monetizing video?

A: The TV Everywhere authentication model used by cable operators is a bit clunky in terms of the user experience but it has value. Netflix is teaching us the “binge viewing” paradigm of releasing an original series all at once. Letting viewers connect to “their” content on various devices and networks is huge. But we need better content discovery across platforms like linear television, VOD, DVR, Internet, and OTT services like Netflix and Hulu. A seamless and powerful interface with a solid business model can drive a lot of change fast. Everybody from Intel, Google, Apple, Tivo, cable MSOs to Amazon and others have their toes in this water.

Q: Mobile technology and behavior is also creating a multi-screen world. What challenges does mobile present for video delivery and monetization?

A: As consumers adopt multi-screen behaviors, programmers and advertisers will follow. For example, ESPN research shows viewers consume ESPN content across an average of four screens. The tipping point will come with the ability to plan, execute and attribute ROI across screens. This involves the transactional platforms that brands and video publishers use; measurement and reporting systems; optimized creative for different screens; and the complementary effect of cross-screen campaigns (we know that broadcast plus mobile video campaigns drive more lift). And it’s not just screens, mobile is such a killer in this category in terms of growth potential, it gets to measuring and attributing user targeting and behavior inside mobile apps since that’s where a lot of traction and engagement occurs.

Q: Drilling down to local, What are some of the ways that Local Television is adapting to today’s changing video environment?

A: Most video advertising is on broadcast television. National spot advertising is sold on Cost Per Point compared to the rest of the video world that is sold on a CPM basis. It’s sort of geeky, but it will be a potential large tipping point if spot TV converts to selling on CPM basis as it reduces a lot of friction in the buying process. We’re doing research on this point for the Television Bureau of Advertising. Of course local television is quite well monetized but another tipping point will come through driving more video monetization in other channels including desktop, tablet and mobile. Most video consumption is still plain old fashioned linear television.

Q: So how does all of this impact the entrenched ways that video ads are bought and sold?

A: Yes, interrelated to all of this is the way video is bought and sold. Often at agencies there are separate video and digital planning and buying teams. Same on the video side. When buying and selling is oriented to video — as a content type with different affinities and values on different screens — and that’s all plugged into pricing and attribution big data algorithms, we’re off and running.

The post Where is Video’s Tipping Point?: A Conversation With BIA/Kelsey’s Rick Ducey appeared first on BIA/Kelsey - Local Media Watch.