Local online advertising is still considered a largely untapped market, but BIA/Kelsey expects that to change over the four years. The researcher is forecasting for local online ad revenues to reach $42.5 billion by 2015, nearly twice 2010’s $21.7 billion, for a compound annual growth rate of 14.4 percent.
The view is predicated on improvement in the U.S. economy. At the same time, the general local ad market is expected to benefit from a healthier economy along with everything else. BIA/Kelsey is projecting the total local ad market to hit $153.5 billion in 2015, up from $136.3 billion in 2010, representing a 2.1 percent CAGR.
Mobile will also play a major role in driving spending in the local space, as the penetration of smartphones has continued to rise even in the depths of the recession. Back in December, BIA/Kelsey offered its prediction that the U.S. mobile ad revenues will grow from $491 million last year to $2.9 billion in 2014 for a staggering CAGR at 43 percent.
The numbers were based on expectations of rising mobile search ads, display on both apps and wap sites and text messaging. But the big spending will come in the form of local ads, which now makes up less than half of the mobile ad market. That will change significantly by 2014.
In addition to mobile, daily deals related ads will also help the local online ad market’s expansion. BIA/Kelsey says the daily deals marketplace will grow to $3.9 billion by 2015, thanks in large part to the placement of these deals on Facebook and Twitter.
Last week, eMarketer presented its view of value of e-commerce, saying that the space grew 14.8 percent to $165.4 billion in 2010. It added that those growth rates should hold steady through 2012, at which point the market will have matured and the double-digit gains will start to level off. Release