Study: Google to dominate local search ad market
Google and its YouTube video-sharing platform will grow their local ad sales 42% from $19 billion this year to $27 billion by 2022, per an estimate by BIA Advisory Services shared with Mobile Marketer. Mobile media channels will be the fastest-growing segment for local advertising, the firm forecast.
Local Google advertising exceeds the total local advertising generated by all 11,044 commercial radio stations in the U.S. and rivals the amount generated by all 1,282 full power commercial television stations. By 2022, local Google advertising will almost double the over-the-air advertising of the entire radio industry, per BIA.
This year, Google's share of all local digital advertising across all markets will be close to 40%. Facebook and Google combined earn about half (48%) of all local digital advertising revenue, per BIA.
Google and Facebook's capabilities of providing highly focused target groups for advertising will give the companies a key advantage in the local ad market. Big-name advertisers that want to drive traffic to stores increasingly will put more of their budgets into Google and Facebook to reach customers who have shifted their media consumption to mobile platforms. Even small businesses with limited marketing budgets can buy ad placements on mobile and social media cahnnels, which also can have refined geotargeting to reach mobile consumers who agree to have their movements tracked by apps.
Google and Facebook's moves into local advertising will have a negative effect on print media, just as they have for nationally distributed magazines and newspapers. Local radio and TV advertising will also feel the threat of online competition as their sales remain relatively flat, per Mark Fratrik, chief economist at BIA.
BIA Advisory Service's estimate of $19 billion in local ad revenue for mobile platforms falls behind categories like direct mail ($38.5 billion) and local TV ($20.8 billion). Mobile's share will grow from 12.6% of local ad spending in 2018 to 19.2% by 2022, the firm forecast in December. Mobile ad tactics — such as geo-fencing, click-to-call and click-to-map — will become more popular among national brands that are putting money into increasingly available and "currently undervalued" mobile local ad inventory, per BIA.