BIA/Kelsey: Local Radio Expected to Hit $15.6 Billion in 2017 Revenue

BIAKelsey-LogoIn the midyear update to its U.S. Local Advertising Forecast 2017, BIA/Kelsey forecasts the overall local media marketplace to experience consistent growth from 2016-2021, reaching approximately $174 billion by 2021 (Compound Annual Growth Rate: 3.8 percent). The company predicts growth will be driven by double-digit increases in mobile and social advertising and local online and mobile video, all slated to experience at least a 17 percent increase by 2021.

Notable for the radio industry, BIA/Kelsey ranks local radio out of the top five media divisions in local ad revenue, coming in at #6 behind mobile.

For 2017, the firm has slightly decreased their advertising estimate to $147.9 billion. An overall weaker than expected economy in the beginning of 2017 has led to softness in advertising revenues. However, future growth in online/digital advertising revenues will be higher than originally predicted, with a 2016-2021 CAGR of 11.9 percent. Over the same period, traditional advertising revenues will see a slight decrease in the 2016-2021 period with a CAGR of -0.6 percent.

“We are on the precipice of different advertising channels taking lead positions in the local advertising marketplace,” said Mark Fratrik, Chief Economist for BIA/Kelsey. “Although national and local businesses still utilize a mix of digital and traditional advertising platforms, the opportunities afforded by mobile, social and video advertising are incredibly valuable due to their measurability, adoption by consumers and enhancements by technologies such as beacons and data attribution that blend extraordinarily well with today‚Äôs mobile consumer.”

According to the forecast, the top five media (revenues and share of market) contributing to the local media pie in 2017 are:

  • Direct Mail: $37.1 billion (25 percent share)
  • Local TV: $20.9 billion (14 percent share)
  • Online / Interactive: $18.6 billion (11 percent share)
  • Newspapers: $16 billion (11 percent share)
  • Mobile: $16 billion (11 percent share)
  • Local Radio (#6): $15.6 billion

“Mobile has replaced radio in the top five media this year, but the dominant player continues to be direct mail,” commented Fratrik.