BIA/Kelsey, a respected authority on local advertising,  gathered top representatives of interactive local media, local search, mobile local and social local media to examine the latest business models, technology and revenue opportunities in a market where local is currently at the leading edge at their recent Interactive Local Media East conference in Boston. Two of the company’s executives who spoke during the conference, Mark Fratrik and Tom Buono, predicted that online advertising revenue will rise to $42 billion by 2015, with a continued shift towards local-focused ads and daily deals.

The firm’s research asserted that online local advertising comprised 14.1 percent of all spending by SMBs, and that in 2011 online advertising spending could reach 16.2 percent. Businesses have already begun to shift their ad budgets from strategies like direct mail and television ads to daily deals like those offered on the immensely popular Groupon.

Businesses are already beginning to shift their ad budgets from traditional marketing, and companies like Google and Groupon are definitely both ready to step in when they do.  Google’s plan seems to be replacing any need for local yellow pages or billboards, while Groupon has proven to be a worthwhile marketing expense as far as word of mouth is concerned.

“New media changes every day because of healthy competition from emerging entries,” Fratrik said.

As firms like Yahoo, Gannett , Living Social, and Cheap Local Deals explore local daily deals offerings, BIA/Kelsey forecasts the daily deals space will generate $3.9 billion in consumer spending by 2015.