Home and Trade Services SMBs report their most popular channels to use are from traditional media: newspapers, print yellow pages and direct mail. Digital is also part of the Top 5 most used with Facebook pages and a website rounding it out. Given the vertical’s heavy reliance on traditional media, there’s an opportunity for traditional media players to bundle digital media to their offerings.

Home and Trade Services is the only vertical industry in our study with print yellow pages among the Top 5 media used for advertising and promotion, and was only in the Top 10 of one other vertical — Professional Services. Print yellow pages also had the highest return on investment (ROI) of the top three traditional media — with nearly 28% saying that their ROI on print yellow pages was either excellent (10-19x) or extraordinary (over 20x) spend.

SMBs in the Home and Trade Vertical had an average annual advertising spend of $12,573 in Wave 18 (Q3/2014), down from $19,238 in the previous wave (Q3/2013). Home and Trade Service SMBs overall will not increase their ad budget in 2015. Nearly 61% of the SMBs in the Home and Trade Services vertical reported that they would maintain their ad spend over the next 12 months and 20.8% say they will increase. While SMBs in the Home and Trade Services utilize traditional media, their budget allocation for digital is increasing. On average, SMBs in the Home and Trade Services vertical allocated 24.7% of their advertising budget to digital in the last 12 months. Over the next 12 months, they report plans to increase it to 27.7%.

Local media players, especially in the traditional channels, have an opportunity to continue to serve their Home and Trade Services SMBs through traditional channels as well as grabbing more of their ad dollars by offering digital products.

Clients of the BIA/Kelsey Advisory Services can find the full Home and Trade Services vertical report here. Interested in finding out more about our LCM survey? Click here.

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Day 2 of Leading in Local: Interactive Local Media conference opened with BIA/Kelsey’s VP and Chief Economist, Mark Fratrik, who shared some exciting pieces of information from BIA/Kelsey’s Media Ad view. Media Ad View is BIA/Kelsey’s research product that offers a market by market view of the local media pie.

Fratrik stated, “Local media advertising revenues will climb to $151.5 billion in 2017.” He also communicated that BIA/Kelsey’s goal is to help clients leverage the real business opportunities inherent in this growth to solidify their leadership position.

“Our research-driven data, strategic analysis and competitive intelligence can help clients make the right decisions,” said Fratrik. Fratrik went out further to outline 7 steps that BIA/Kelsey does to help clients:

Step 1: Acquire reliable view of the local media landscape
Step 2: Size the current and future local market
Step 3: Profile the competition
Step 4: Track advertiser trends
Step 5: Understand the changing consumer
Step 6: Operate with reliable, actionable market insights
Step 7: Create a concise strategic roadmap

As the leading experts in cross-platform local advertising, BIA/Kelsey can help design a business strategy that drives new levels of success for media companies. BIA/Kelsey’s local media & advertising expertise helps clients understand the dynamics of their local marketplace, and identify, analyze and manage the competition. Media Ad View Plus delivers the media industry’s most reliable, comprehensive data and insights, Media Ad View is used by many of the largest media companies in the U.S. to evaluate market opportunities across multiple dimensions: market, media and business category.

The post At Leading in Local: ILM 2013: Playing to Win: Building a Leading Interactive Local Sales Strategy appeared first on BIA/Kelsey - Local Media Watch.

2012 General Services Ad Spending by Media

But 2012 is the last year that Print Yellow Pages is expected to be on top in the General Services vertical. BIA/Kelsey expects Direct Mail to surpass Print Yellow Pages in this vertical in 2013. By 2017, Print Yellow Pages’ share of the General Services advertising pie is expected to fall to 11%, with Internet Yellow Pages’ share growing to 12%. BIA/Kelsey projects General Services’ advertising revenue on Internet Yellow Pages to surpass their Print Yellow Pages counterpart by 2017. Direct Mail will continue to be the dominant medium in the General Services vertical, with nearly 26% of the advertising revenue.

Health is the next biggest vertical for Print Yellow Pages advertising with 17% share. As advertising revenues for Print Yellow Pages decline, general services and health will remain the top two verticals for the medium.
By 2017, total Print Yellow Pages advertising revenue will have declined from nearly $5.5 billion in 2012 to $2.2 billion, a five year compound annual growth rate (CAGR) of negative 16.5%. All of Print Yellow Pages’ verticals are expected to have double digit declines between 2012 and 2017, with the biggest dollar loss coming from General Services.

Internet Yellow Pages, on the other hand, is expected to increase from less than $2.2 billion in 2012 to $3.3 billion in 2017, a five year CAGR of 9.0%, making Internet Yellow Pages the third fastest growing medium out of twelve, according to BIA/Kelsey’s Media Ad View Plus.

More information on Media Ad View Plus is available here.

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This morning at SMB Digital Marketing, BIA/Kelsey Chief Economist Mark Fratrik and VP of Business Development Steve Passwaiter walked through a view of the U.S. local media marketplace, and offered a sample of BIA/Kelsey’s Media Ad View Plus, a data product that allows local sellers to see how advertisers allocate their spend in local markets.

Fratrik offered a quick overview of the U.S. local advertising market. In 2013, local advertising will have a slight increase, just 0.2%, due to a sluggish economy, plus no political advertising following $3 billion in political ads in the 2012 election cycle. In general, local advertising is not keeping pace with overall economy.

The movement toward digital is ongoing, and also one reason for slugging advertising growth. Digital is less expensive, more price effective, which means advertisers are less likely to increase their overall ad spend. The movement toward non-advertising marketing solutions may also be contributing to the sluggishness, Fratrik said.

By 2017, the local ad market will reach $148.8 billion, about $41 billion of which will be online/interactive. Newspapers are still an important player in the local media marketplace. However, online/interactive and particularly mobile will be the growth drivers of local media. Mobile for example, will grow from less than 2 percent in 2012 to more than 6 percent in 2017.

Media Ad View Plus takes BIA/Kelsey’s forecast down to the local and vertical level. MAV looks at local markets five years forward, and answers questions like, “How much do auto dealers in Austin, TX, spend on video display advertising?” [See the chart below for the answer.]

“This allows you to see, where should you play offense, where should you play defense? MAV helps you make more informed decisions,” Passwaiter said. “How effective are you? Where are you over- or under-achieving? Having this helps you separate yourself from all the others in the marketplace who are just trying to sell something.”

Passwaiter noted that MAV is available at a reduced rate of $1295 per market, good until Sept. 27.

The post SMB Digital Marketing Conference: The Shift in SMB Ad Spend appeared first on BIA/Kelsey - Local Media Watch.

BIA/Kelsey projects Out-of-Home advertising revenue to grow from $7.3 billion in 2012 to $9.0 billion in 2017, a compound annual growth rate (CAGR) of 4.3%.

While leisure/recreation was Out-of-Home’s biggest spending vertical, more leisure/recreation advertising dollars went to newspaper in 2012 than Out-of-home. In 2012, Out-of-Home Advertising was the second highest media among Leisure/Recreation advertising, according to Media Ad View Plus, with 18.5% of the vertical’s advertising spend. Newspaper accounted for 21.7% of the vertical’s advertising spend. However, as newspaper’s advertising revenue continues to decline, BIA/Kelsey projects leisure/recreation spending on out-of-home will outpace newspaper in 2014.

2012 Leisure/Recreation Ad Spending by Media

Media Ad View Plus breaks the Leisure/Recreation vertical into 10 subcategories: Traveler Accommodation (Hotels-Motels); Airline Transportation; RV (Recreational Vehicle) Parks and Recreational Camps; Performing Arts Companies; Spectator Sports; Museums, Historical Sites, and Similar Institutions; Amusement Parks and Arcades; Gambling Industries; Other Amusement and Recreation Industries; and Motion Picture and Video Exhibition. In 2012, Traveler Accommodation (Hotels-Motels) accounted for more than 35% of the spending on Out-Of-Home advertising in the Leisure-Recreation vertical.

The Out-of-Home advertising medium includes more than just billboards. The chart below, from the Outdoor Advertising Association of America (OAAA), shows the different Out-of-Home displays available to advertisers.

Source: OAAA

According to OAAA, billboards accounted for 64% of Out-of-Home advertising in 2012, followed by transit with 17%, alternative with 12% and street furniture with 7%.

More information on Media Ad View Plus is available here.

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Unlike other media, radio advertising is quite diverse, generating 10% or more of its advertising from five different verticals. Retail (18%), Financial/Insurance (17%), Restaurants (14.5%), Automotive (14%), and Technology (10%) accounted for almost 3/4 of advertising on radio in 2012.

Diving into the top vertical, Retail, warehouse clubs and supercenters accounted for the largest share of retail advertising, 22.7%, just as it was in other media I’ve discussed, such as newspaper and direct mail.

Three out of eleven subcategories accounted for a combined 67% of the advertising spend in the financial/insurance category: commercial banking, securities brokerage and auto insurance.

Media Ad View Plus breaks the restaurant category into seven subcategories. Three of these subcategories accounted for 83.5% of advertising revenue in this category for radio: full-service restaurants, supermarkets and other grocery stores (not including convenience stores) and quick-service/fast food restaurants.

For automotive, auto dealers and manufacturers accounted for nearly 77% of the category’s advertising spending, much as it did for television and newspaper.

In the Technology category, the wired telecommunications carriers and wireless telecommunications carriers (except satellite) accounted for a combined 72% of the advertising spend in the category.

BIA/Kelsey projects radio advertising revenue to increase at a compound annual growth rate (CAGR) of 2.85% from 2012 through 2017. In 2017, radio advertising is projected to reach nearly $16.9 billion, representing 11.4% of total advertising spend for the year. Retail, financial/insurance, restaurants, automotive and technology are expected to remain the top categories for radio advertising spending in 2017.

More information on Media Ad View Plus is available here.

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In a previous blog post, I mentioned that newspaper was the medium of choice for real estate advertising in 2012. However, while newspaper accounted for 27.7% of real estate advertising spend, the real estate vertical accounted for only 2.5% of newspaper advertising revenue. Retail (23.5%) and automotive (16%) were actually the largest vertical categories advertising with newspapers in 2012, according to BIA/Kelsey’s Media Ad View Plus.

Approximately 22% of the retail advertising revenue going to newspapers came from one of the 28 retail subcategories broken out in Media Ad View Plus: warehouse clubs and supercenters. For automotive, more than 77% of the advertising revenue going to newspapers came from automotive dealers and manufacturers. This isn’t surprising, as both warehouse clubs/supercenters and automotive dealers/manufacturers have the highest spend in their respective categories across all media.

BIA/Kelsey projects that newspaper advertising revenue will continue falling, reaching $21.3 billion in 2013, a loss of 5.4%. By 2017, BIA/Kelsey expects newspaper’s share of total advertising spend to have continued to decline, falling to just under 12% of total advertising spend. Newspaper advertising revenues are expected to fall from $22.5 billion to $17.8 billion, a compound annual growth rate (CAGR) of negative 4.7%. This projection places newspaper in third place in advertising spend, behind direct mail and television, but just ahead of radio and online.

With advertising revenue dropping, newspapers are looking for alternative sources of revenue. “Digital pay plans are being adopted at 450 of the country’s 1,380 dailies and appear to be working not just at The New York Times but also at small and mid-sized papers. Twinned with print subscription and single-copy price increases, the digital paywall movement has circulation revenues holding steady or rising. Together with the other new revenue streams, these added circulation revenues are rebalancing the industry’s portfolio from its historic over-dependence on advertising,” says The Pew Research Center’s Project for Excellence in Journalism’s State of the News Media in 2013 report.

BIA/Kelsey projects that in 2012, online represented 13.8% of newspaper’s advertising revenue. This is expected to increase to 20.5% in 2017.

More information on Media Ad View Plus is available here.

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2012 Real Estate Ad Spending by Media

So nearly 28% of real estate ad spending goes to newspaper and 24% goes to online, according to Media Ad View Plus, but where are home buyers actually looking for homes? According to National Association of Realtors in their 2012 Profile of Home Buyers and Sellers, “nine in 10 home buyers today rely on the internet as one of their primary research sources, and 52 percent turn to the web as their first step.”  As you can see below, while 90% of home buyers might use Internet as a primary research source, the National Association of Realtors reports that only 27% use newspaper ads.

• Internet: 90%
• Real estate agent: 87%
• Yard sign: 53%
• Open house: 45%
• Newspaper ad: 27%
• Home book or magazine: 18%

In a joint study by National Association of Realtors and Google, entitled The Digital House Hunt: Consumer and Market Trends in Real Estate, they found that 89% of new home shoppers used a mobile search engine and that 68% used a mobile application throughout their research process.

Not surprisingly, given the National Association of Realtors and Google’s findings, online advertising spending is expected to grow rapidly.  By 2017, online is expected to be the medium of choice for real estate, with nearly 41% of the advertising pie, according to Media Ad View Plus. Meanwhile, newspaper’s share of the real estate advertising pie is expected to decline, reaching less than 7% by 2017. Mobile is also expected to benefit from the newspaper industry’s continuing decline, as its share increases from 1% to 12.6%.

2017 Real Estate Ad Spending by Media

BIA/Kelsey is projecting online’s revenue share to start surpassing newspaper’s in the Real Estate vertical in 2013.

More information on Media Ad View Plus is available here.

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Television dominated the Government/Political/Religion (“GPR”) vertical in 2012, according to BIA/Kelsey’s Media Ad View Plus. In 2012, television’s $3.1 billion of advertising from GPR represented nearly 3/4 of total advertising for this vertical.

2012 Government/Political/Religion Ad Spending by Media

The $3.1 billion of GPR advertising represented 15% of the television media’s total ad spend in 2012, with the vast majority of it coming in the Fall (September to November), based on information from the Television Bureau of Advertising (TVB). TVB has studied the spending patterns in the political category for the past several election cycles. The vast majority of political spending occurs in the Fall (September to November), with the exception of primaries, which provide some advertising revenue from January to September, at least in markets within battleground states. “Clearly local TV’s role as the campaign media workhorse has not changed” states the TVB about the 2012 election season.

GPR advertising is cyclical, peaking during big national and local elections, which occur during even years. The more hotly contested the elections are, the better for local television stations. In 2017, an odd year with no major political elections, the GPR advertising landscape is vastly different, with only 19% of GPR advertising revenue going to television. More GPR advertising revenue will be going to direct mail than television in 2017, according to Media Ad View Plus. In odd years, such as 2017, GPR is dominated by smaller local elections, which rely more on direct mail to get their message to voters in their districts rather than advertise to entire television markets.

2017 Government/Political/Religion Ad Spending by Media

The bounty that can be GPR revenue during the even years is not equal across the 210 Nielsen television markets. Markets located in battleground states will see greater GPR advertising spend than markets in states that are heavily red or blue. States such as Ohio, Virginia and Florida have become predictable battlegrounds states. These so called “purple” states see boosts during even years, with the Presidential, Senate and House races.

More information on BIA/Kelsey’s Media Ad View Plus is available here.

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In 2012, television dominated both the Automotive advertising and Government/Political/Religion (“GPR”) verticals, according to BIA/Kelsey’s Media Ad View Plus. More on the GPR vertical later.

Television’s $4.6 billion share of automotive advertising represented 28.4% of total automotive advertising in 2012. This $4.6 billion represents 22% of television’s total advertising revenue in 2012, making it the highest spending vertical for television.

2012 Automotive Ad Spending by Media

Media Ad View Plus’s automotive vertical includes five subcategories: automobile dealers and automotive manufacturers, other motor vehicle dealers, automotive parts and accessories stores, tire dealers, and gasoline stations and automotive repair. Of these, automotive dealers and automotive manufacturers were the predominant advertiser category, accounting for more than $3.8 billion of the total automotive advertising $4.6 billion spent on television.

“If it’s got a screen, automakers want to advertise on it,” said Ad Age in a recent article, Automakers Like Video, But Still Pour Gas On TV For Big Product Launches. While the automakers on Ad Age’s 100 Leading National Advertisers list have been increasing their digital advertising, “they’re also showing enduring faith in the American couch potato, with spending on television increasing from 2011 to 2012. Ad Age attributes the continued popularity of television to the automotive vertical to major product launches. The top five spending automakers, according to Ad Age, are General Motors, Ford, Toyota, Fiat (Chrysler Group) and Honda.

In 2017, television’s share of automotive advertising is expected to increase to 32%, while the shares going to other traditional media such as newspaper and direct mail are expected to decline significantly. Newer media, such as online and mobile, are also expected to increase their share of the automotive pie. Part of this increase can be attributed to the significantly lower GPR revenues expected to be spent on television in 2017. Without GPR dominating television commercials in 2017, as happened in 2012, there will be more inventory available for the other verticals, such as automotive.

More information on Media Ad View Plus is available here.

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