BIA Predicts $171B in U.S. Local Ad Spending for 2025

RADIO ONLINE | Tuesday, August 6, 2024

BIA Advisory Services

In its latest forecast, BIA Advisory Services has provided an outlook on the U.S. local advertising landscape for the next two years, predicting a significant shift in advertising dynamics by 2025. According to BIA, local advertising revenues are set to reach $171 billion in 2025, marking a 5.5% increase in non-political ad spending from the revised 2024 estimate. This increase comes despite a projected slight decline of 1.3% when including political advertising from the high benchmark of $173.7 billion in 2024.

The adjustment in the 2024 forecast reflects an additional $560 million in political advertising revenues, bringing the total expected spending for the year to $11.7 billion, a 21.3% increase from the 2020 election cycle. This surge is largely attributed to heightened local television spending, although Connected TV/Over-the-Top (OTT) platforms are also expected to benefit significantly from the increased political advertising dollars.

Nicole Ovadia, VP of Forecasting & Analysis at BIA, commented on the adjustments, noting, "With macroeconomic factors influencing slower than expected spending in 2024, we've adjusted our forecasts to provide a clearer picture of the advertising landscape from various perspectives. Our refined projections now account for potential economic shifts post-Q1 2025, such as changes in interest rates and inflation, which could boost consumer confidence and subsequently, media ad spend."

Looking ahead to 2025, digital advertising is poised to surpass traditional media for the first time, capturing 52% of the total local ad spend at $89 billion. Traditional advertising will account for 48%, or $82 billion, of the market. This shift underscores the growing importance of digital platforms in local advertising strategies.

Promising growth sectors without political advertising influences include PC/Laptop (up 13%), CTV/OTT (up 9.1%), Out-of-Home (up 5.9%), and TV Digital (up 5.4%). Rick Ducey, Managing Director at BIA, elaborated on the evolving media landscape, stating, "While streaming platforms offer fewer ad minutes than linear TV, the integration of premium TV's appeal with digital targeting capabilities continues to attract political and issue campaigns, presenting new opportunities and challenges for advertisers."

BIA's forecast covers an extensive range of media types and market verticals, with notable growth expected in categories such as Restaurants (up 9.5%), Real Estate (up 6.7%), and Retail (up 5.5%), collectively dubbed the "Three Rs of 2025." These sectors are anticipated to drive significant local advertising and media activity.