• by Wayne Friedman , September 12, 2012

Local advertising by retailers will grow their online share of marketing -- as well as on TV, radio and local cable by 2016 -- while direct response and newspaper budgets will continue to decline.

BIA/Kelsey says retailers will spend $4.2 billion this year in online marketing -- including mobile -- a 13% share out of an estimated $26.8 billion in all local TV advertising spent by retailers. This will climb to a 16% share in three years.

Local TV broadcast's share will rise to 8.4% from 7.9% in 2013 for retailers; with radio increasing to 10.8% from 10.2%; and local cable TV to 2.6% from 2.5%; and out-of-home, 2.9% from 2.6%. Mobile advertising will more than double to 2.1% share from 1% by the end of 2013.

Direct response marketing -- far and away the largest local marketing category for retailers -- will dip. Its share is projected to sink slightly, to 41.5% from 42.5% this year. Newspapers will slide the most, to 15.5% from 19.5% by the end of 2016. Local magazines will dip to 0.8% from 0.9%.

Mark Fratrik, vice president and chief economist, BIA/Kelsey, stated: "Within the online segment, video display is seeing some of the greatest gains, with the top five business categories expected to account for an increase of $232 million in local spending nationwide in 2013 alone."

BIA/Kelsey projects retailers will spend $635 million on online video next year; general services advertisers, $190.3 million, with financial and insurance marketers getting to the same level; automotive, $182.4 million; and restaurants, $137.7 billion.

Overall estimates are that local automotive advertising spend will be $16.9 billion in 2013 with $2.7 billion coming to online marketing; general services will get to $15.3 billion and $3.1 billion going to online; restaurants, $14.0 billion overall and $2.3 for online; and financial and insurance, will be at $13.9 billion and $2.7 billion.

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