Research by the Kelsey Group and BIA Advisory Services indicates that the U.S. local advertising market will progressively decline over the next few years, with a compounded annual decline of 1.4 percent expected until 2013.

In dollar terms, spending on traditional local media advertising – e.g. newspapers, local Yellow Pages, etc – is expected to drop from $141.3 billion in 2008 to barely over $112 in 2013.

Spending on local online media will, however, make up an increasing proportion of total local ad spending. Kelsey and BIA Advisory expect the percentage of local advertising devoted to online media to rise from just under 12 percent in 2009 to over 22 percent in 2013.

The firms expect more advertisers to invest in online directories (e.g. online Yellow Pages), local search marketing, email marketing and various other Internet marketing initiatives.

Source: eMarketer, “US Local Ad Market Shrinking,” March 10, 2009

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