Local television revenues keep growing

The newest data from BIA/Kelsey paints an optimistic picture for local, over-the-air television revenues, and the study’s author says there’s more to come. According to the report, the local television industry experienced 23.2 percent growth in 2010, achieving over-the-air revenues of $19.4 billion. The impressive growth came due to an improving economy (especially the automotive sector) and a hot mid-term election season.

“Last year’s impressive numbers were buoyed by strong political spending and a faster than expected rebound in ad buying by national advertisers wanting to reach local audiences,” said Mark Fratrik, Ph.D., vice president, BIA/Kelsey. “Even with some erosion of viewers, it was a strong demonstration that local television continues to show its value to advertisers by delivering the shoppers, voters, and influencers they want to reach.”

Fratrik told me via email that the up/down nature of the below revenue chart is actually deceptive, because if you took out political, each year would show growth.

BIA Kelsey TV revenue growth rates

“If you would subtract the political advertising you would get consistent up years,” Fratrik said. “So long as there is so much political advertising being spent, there will continue to be down years in the odd years.” Fratrik told me he was struck by the sheer volume of political money spent last year at the local level, apparently because “local television stations continue to provide candidates with access to potential voters.”

Fratrik is confident the industry is on the road to recovery, although not in usual, post-recession ways.

We build up on a local basis looking at the recent history of a particular market and the economic conditions present in those markets. Overall I see the economy moving forward positively, though not at very high rates, which is not the usual case when the economy comes out of a recession.

BIA/Kelsey also reports local television stations earned $450 million from digital and mobile advertising in 2010 and estimates that number will climb to $890 million by 2015. That’s a small number, of course, compared to $19.4 billion, but it’s the one to watch. Mobile is the wildcard, but there’s also the question of how long television’s relative strength in the advertising mix can be sustained in an environment where ratings are consistently tracking downward. That makes any long term forecast problematic.

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