Borrell's Cassino: Local's Future Is All Digital

New York -- The growth of local online advertising is on such an upward trajectory that for the first time ever the category is expected to garner a greater percentage of local dollars then other kinds of media by 2015.

At the same time, a larger percentage of the local money that will be spent online will be targeted on mobile versus the “old” new media of the Internet.

That, at least, is how Borrell Associates executive vice president Kip Cassino sees it, setting the mood for Thursday’s Borrell Associates Local Online Advertising Conference in New York with a forecast saying that in the near future, it’s all about digital.

“There is no question now about the question of online,” Cassino said.

Whereas advertisers spent about $13.5 billion on local online ads in 2010, that number is expected to increase to $24 billion by 2015 -- growth that will be accompanied by a shifting focus on digital versus traditional media advertising, he said.

In fact, Cassino believes that by 2015, 26% of all local advertising dollars will be spent online, meaning that for the first time ever digital will earn more local ad revenue than traditional media.

Cassino predicted nearly 23% of those dollars will go to newspapers -- which usually get the most ad dollars -- and about 16% will head to TV stations during that same year.

Though some analysts prefer to separate online and mobile advertising, Cassino’s forecast includes both categories, with mobile considered a subset of “the old online.”

He predicts that the surge in mobile advertising expected over the next five years will push the percentage of local online ad dollars being spent specifically on mobile from 15% today to 64% by 2015.

“The purchase of mobile devices will have replaced the desktop devices that we now have,” Cassino said.

The nature of advertising itself will also morph, with a shift toward promotions over traditional ads, he said. Though promotions -- such as special discounts -- have always been bigger than traditional ads, Cassino expects them to become an even bigger force as new technology, means of digital advertising and targeted marketing becomes available.

“We are shifting to a whole new array of spending and spending categories that we’re not clearly imagining right now,” he said. “But certainly all those old boundaries that we grew up with and were taught in our marketing textbooks are things in the past.”

[Editors Note: Corrected to say that 16% of local ad dollars will head to TV stations in 2015.]