Digital Ad Revenue to Rocket for Local TV, Radio March 9, 2010 -By Katy Bachman
The growth of digital advertising revenue for local TV and radio will outpace overall ad spending for those media between 2009 and 2014 according to a BIA/Kelsey forecast released Tuesday (March 9). Digital revenue from multiplatform, mobile and Web, will grow at a 17.8 percent compound annual rate to $2 billion compared to total ad revenue, which will grow at a CAGR of 2.8 percent to $34.3 billion. By 2014, local TV digital ad revenue will reach $1.2 billion and represent 6.5 percent of TV’s total $18.3 billion in revenue, up from 3.1 percent in 2009. Radio digital revenue will reach $0.8 billion representing 5 percent of radio’s $16 billion up from 2.9 percent in 2009. “Broadcasters must evolve to participate in more areas of the media ecosystem,” said Rick Ducey, chief strategy officer for BIA/Kelsey. “This means developing the right multiplatform and multiple revenue stream strategies which in turn requires new workflow, partnerships, business models and resources.” Though the BIA/Kelsey forecast shows total revenue increases for both radio and TV between 2009 and 2014, both media are still playing catchup to 2008 when TV revenue totaled $20.6 billion and radio totaled $16.8 billion. In 2010, TV revenue is expected to increase 4.3 percent to $16.8 billion with digital revenue hitting $600 million, a 20 percent increase. Radio revenue will inch up 1.5 percent to $13.9 billion, with digital revenue increasing 25 percent to $500 million.