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Upward path with stairs symbolizes projected growth of ad revenue in 2017.

Ad Revenue Is Projected to Grow in 2017, Despite Fewer Major Ad Events

December 2nd, 2016   ||    by Melanie Brown   ||    No Comments

Coming in on the heels of a particularly strong year for television ad revenue, local ad spend for 2017 is projected to rise again, according to BIA/Kelsey’s recent forecast. While big events in 2016 like the Olympics in Rio de Janeiro and the presidential race were more or less accounted for, the year also brought a few wild cards, including the Chicago Cubs’ first World Series win in 108 years and an election that saw the most media coverage of all time.

Between a strong upfront performance earlier this year and the unforeseen twists this fall, 2016 turned out to be a healthy market for television advertising. And yet the overall local ad spend in 2016—projected to end up at $145.2 billion—is still slated to be topped in 2017.

BIA/Kelsey projects that local ad spend will reach $148.8 billion next year, a growth rate of 2.4 percent. If you excluded political advertising spend from the 2016 numbers, that growth rate would stand at 3.9 percent overall.

What’s Growing?

Online and digital advertising will continue to be a huge growth area for local advertisers. As the most localized way to deliver ads to an audience, online and digital outlets are slated to garner 13.5 percent more spend than they did in 2016, jumping from $44.2 billion to $50.2 billion. According to BIA/Kelsey SVP and Chief Economist Mark Fratrik, the spend on digital and online outlets for local advertising will exceed that of traditional print media by 2018.

What’s Shrinking?

While digital continues to see expansion, traditional ad revenues in 2017 are projected to decrease by 2.4 percent. Print and over-the-air media, including television, is looking to garner $98.6 billion overall in 2017, as opposed to a spend level of $101.1 billion in 2016. The forecasted drop in traditional ad spend is likely due to a television landscape that will return to normal in the absence of the huge, audience-drawing events we saw in 2016.

And What Does It Mean for TV?

Despite the decline in spend for traditional media, broadcast television is still expected to see 13.3 percent of overall local ad spend in 2017, the second-largest share of the year’s total projected spend, after direct mail. The opportunity is there for local television to up its ad revenue in 2017.

After a successful 2016, national and local advertisers alike can capitalize on the ability of local broadcast television to reach target audiences more effectively, as well as tap into a growing economy on the local level.

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