BIA Lowers 2023 U.S. Local Ad Estimate to $161.7 Billion

RADIO ONLINE | Tuesday, June 27, 2023 | 3:41pm CT

BIA Advisory Services

BIA Advisory Services has decreased its 2023 U.S. Local Advertising Forecast estimate to $161.7 billion, from its original estimate of $165.7 billion due to a mixed start in the economy this year and the tempered growth in digital advertising. Radio OTA is expected to hit $10.4 billion, while Radio Digital's forecast is $2.8 billion. The updated 2023 forecast shows traditional media will earn $84 billion, with digital revenue reduced from an original estimate of $81 billion to $78 billion.

"After Meta, Alphabet and others lowered expectations for 2023, we examined local digital advertising spending revenues over the first six months of the year and determined a reduction was necessary," said BIA Advisory Services VP Forecasting and Analysis Nicole Ovadia. "After years of double-digit growth, we are seeing some headwinds that will have a significant impact on digital local advertising. For traditional media, while we've made changes to certain media and categories throughout our forecast, the total ad forecast for this segment remains consistent with our original expectations."

Taking political out of the expected ad spend this year, key indicators for media channels in 2023 include the following:

• Broadcast TV OTA (+0.2 percent), TV Digital (+4.9 percent) and Radio Digital (+4.1 percent) will see small increases even in this non-political year.

• The top three paid media channels for 2023 include Direct Mail ($37B), Mobile ($32B), and PC/Laptop ($28B).

• CTV/OTT is still slated to be the fastest-growing (18.5 percent this year), with an estimated $2.4B in revenue.

When examining the top spending sub-verticals, BIA advises that later in the year, growth is expected in Auto, and the company is raising expectations for Tier 3 - New Car Dealers, and Automotive Repair Services. Other important verticals for local advertising where BIA is raising expectations include Savings/Credit Institutions and Other Loan Services, Plumbers and HVAC, and Realtors. Although political will be a huge advertising category in 2024, BIA does anticipate some spending to begin later in 2023.

The updated local advertising forecast for 2023 lowers estimates for Online Gambling, Office Supplies and Stationery Stores, Auto & Direct Property Insurance, Health & Personal Care Stores.