Digital Still Growing at Traditional Media’s Expense but Direct Mail, TV Top ‘Local’

Digital advertising was seen for years as a way to drive brand awareness or e-commerce transactions at national or international scale. Over time, that has given way to a more varied and in many cases “localized” approach, which is more engaging to consumers.

Online to offline influenced buying is many times larger (trillions vs. billions) than e-commerce. And with location data playing an increasingly central role in digital marketing, brands are waking up to the importance of targeting “local” consumers with digital channels. Mobile has largely driven this shift.

But despite the steady migration of dollars to digital, the top revenue categories in “local” are still traditional media. Direct mail and local TV, according to BIA/Kelsey, top the list of local advertising channels, which will generate $147.9 billion this year.


Here is BIA/Kelsey’s list of the top six revenue slices of the “local media pie”:

  1. Direct Mail: $37.1 billion (25% share)
  2. Local TV: $20.9 billion (14% share)
  3. Online / Interactive: $18.6 billion (11% share)
  4. Newspapers: $16 billion (11% share)
  5. Mobile: $16 billion (11% share)
  6. Local Radio: $15.6 billion (10% share)

Yet if we combine “online/interactive” and “mobile” into a single “digital” category, it would rise to number two on the list, with a 22% share of total local ad spend. Behind the scenes, Google and Facebook have transformed the media mix for brands and SMBs alike and that will likely continue.

But traditional media are hanging on, according to the forecast, with direct mail somewhat surprisingly leading the way. Indeed, while the BIA/Kelsey forecast is broadly consistent with others, it’s somewhat contrarian. Other estimates project digital cannibalizing traditional media more quickly.

By 2021, BIA/Kelsey expects local digital advertising to be up 12%, while traditional channels will remain stagnant or decrease slightly. The larger point is that in a complex media marketplace, brands and SMBs are struggling to put together the right mix of channels to reach consumers and influence buying.

The internet was supposed to bring greater transparency and “accountability.” But for most SMBs and even brands, the opposite has largely occurred. The challenge for today’s local marketer, whether a brand or an SMB, is multi-faceted:

  1. Defining a local audience for a given campaign
  2. Understanding the consumer path to purchase and the various media that influence buying (Facebook, local newspapers, local TV, etc.)
  3. Reaching consumers at a time and place when they’re receptive to marketing messages
  4. Generating copy and ad creative that is relevant to the targeted audience and resonates
  5. Tracking performance and determining which channels are actually driving results
  6. Optimizing the campaign to improve efficiency and maximize the spend

Brand marketers with multiple locations are faced with the challenge of doing a version of this for hundreds or even thousands of stores. And while most marketers recognize that a multi-platform, multi-channel approach is required, execution and performance vary dramatically — especially for DIY SMBs.

According to the forecast, local ad spending will continue to shift to digital channels; however traditional media declines appear to be slowing. But new channels such as voice search and virtual assistants inject additional complexity and uncertainty into the equation.

Even as location-based digital tactics are becoming more sophisticated and the insights more powerful, the challenge of reaching the right audience at the right time continues to grow as well.

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