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Future of Advertising: Local and Mobile

The amount spent on local advertising will increase 12.3 percent and the amount spent on digital advertising will double by 2017, according to a study by BIA/Kelsey.
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It’s no secret that advertising is going digital thanks to effectiveness of online and mobile ads, but it might come as a surprise that it’s also going local.

The amount of money spent on local advertising—advertising in mediums like local newspapers, magazines, and on local public radio—is poised to increase from $132.5 billion in 2012 to $148.8 billion in 2017, according to a study released yesterday by BIA/Kelsey, an advertisement consultation firm.

According to Mark Fratrik, the chief economist at BIA/Kelsey, this 12.3 percent increase in spending will mostly come not from local advertisers, like small businesses, but instead from national brands and franchises. Local advertisers will increase their spending on local advertising by just under 9 percent by 2015, whereas national advertisers will increase the same type of spending by 20 percent.

“Large advertisers are realizing that sometimes a nationwide message won’t work; sometimes you need to tailor an ad to a particular type of person in a particular area,” Fratrik told Inc.

Most of the increases in advertisement spending will occur on the digital side of things, Fratrik said. The amount spent on online and digital media is expected to almost double by 2017, accounting for $41.1 billion in advertising and almost a third of all money spent in the space. Spending on advertising in traditional mediums, such as newspapers, magazines, and yellow pages, is expected to flat-line or even decrease by just over 1 percent to $107.6 billion in 2017.

According to the study, the increase in dollars spent on digital advertising will be fueled in a large part by an increase on spending on mobile ads, which is expected to increase six-fold to $6.4 billion by 2017. Online ads will also increase 46.5 percent, but will actually account for less spending than mobile ads by 2017 at $6.3 billion.

“Mobile’s the explosion—just in the way it affords advertisers the ability to target people in specific locations at specific times,” Fatrik said. “If you want to advertise something like a lunch special, most working people can’t be reached by local TV or radio, and they’re not necessarily reading the newspaper. But they have a mobile device that can display an ad at 11:15 for french fries at the McDonalds that’s three blocks away. And boy, that’s the great aspect of it.”

 

Last updated: Mar 20, 2013

SAMUEL WAGREICH | Staff Writer

Samuel Wagreich is a reporter for Inc.com. He covers tech industry culture and trends, entrepreneurship, and issues facing small businesses.




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