Digital and Political Advertising Among Bright Spots in 2012 

Analysts Will Share Local Media Predictions for 2012 in January 19 Webinar

CHANTILLY, Va. (Jan. 17, 2012) - Stocks of publicly held local media companies performed worse last year than the overall stock market, falling 18.7 percent, according to BIA/Kelsey's Local Media Index (LMI). The LMI tracks the local media sector, with a market capitalization of $2.2 trillion, to better reveal underlying dynamics in both secular and cyclical industry trends. 

 

BIA/Kelsey concludes, overall, there is a secular shift toward growth in digital revenues as an increasing component of a fairly flat local advertising economy. As local media companies shift their ownership portfolios along with their sales and product strategies, eventually the results are reflected in share prices, with local media companies more involved in the digital space benefiting most. 

 

Certain subsectors, such as Yellow Pages and newspapers, brought down the LMI, with those sectors' indices dropping by 77.5 percent and 27.8 percent, respectively. 

 

Elements of the LMI that were positive last year and hold equal, if not greater, promise in 2012 include online advertising and search (8.0 percent), diversified media (7.8 percent), broadcast television (6.1 percent) and radio (2.1 percent). 

 

"BIA/Kelsey's Local Media Index is showing the values of local media companies can be more volatile to the perceptions about the future of the economy and local ad spending than the S&P itself, a fact that would not reveal itself through other indices," said Mark Fratrik, vice president, BIA/Kelsey. "Last year's poor performance of the LMI was caused by deep concerns over the health of the global economy in Q3 and the belief that businesses would severely cut back on their advertising spending. While the last quarter of 2011 saw a rebound in media stocks, the drop-off had been too significant to overcome."

 

The chart below tracks local media stocks vs. the S&P 500

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BIA/Kelsey sees the prospects for local media companies improving along with the economy in 2012. The anticipated strong political advertising year and the outlook for radio and television stations should bolster several sectors in the LMI.

With the maturity of digital technologies driving the delivery of content across multiple platforms, advertising opportunities are significantly increasing, and local media firms are starting to book incremental sales. According to BIA/Kelsey's forecast, by 2015 approximately 25 percent of all ad dollars spent in local media will be in digital media augmenting traditional media spending. Increasingly, this will occur in coordinated cross-platform media buying with integrated creative and marketing campaigns.
 
The below chart separates the BIA/Kelsey LMI by category: 
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BIA/Kelsey will examine the opportunities for 2012 during a free webinar on Thursday, Jan. 19, titled, "Looking Ahead to a Year of Transition and Transformation for Local Media." For more information and online registration, go to https://www1.gotomeeting.com/register/233280920.  
About BIA/Kelsey's Local Media Index
Launched in 2011, the Local Media Index is a $2.2 trillion market capitalization index offering a directional view of how approximately 60 publicly traded local media companies in the key sectors BIA/Kelsey follows and analyzes are performing relative to the overall economy. The LMI includes public companies tracked by BIA/Kelsey in cable, broadcast television and radio, newspapers, print directories, outdoor and digital/online advertising. The index is updated each Thursday morning on the BIA/Kelsey website and can be found at www.biakelsey.com/LMIndex

 

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