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BIA Estimates 2025 Local Ad Revenue to Reach $171B


BIA Advisory Services
BIA Advisory Services

According to BIA Advisory Services' latest forecast, U.S. local advertising revenue is projected to reach $171 billion in 2025, a 6.1 percent increase from 2024, driven largely by a surge in digital media spending, BIA Advisory Services reports. Including political spending, which notably declines post-election year, the total is slightly adjusted to $171.4 billion, marking a 0.5 percent decrease from the previous year.

However, not all sectors within the advertising landscape are experiencing growth. Radio advertising presents a mixed bag, with overall revenues experiencing a decline. Over-the-air (OTA) and digital combined radio revenues are expected to drop by 4.90 percent from $13,001,448 in 2024 to $12,367,371 in 2025. This includes a significant 6.00 percent decrease in OTA revenues from $10,608,041 to $9,970,551. Conversely, digital radio shows a minimal uptick, rising by 0.10 percent to $2,396,820.

Nicole Ovadia, VP of Forecasting and Analysis at BIA, emphasizes the durability of local ad markets. "Local advertising is showing resilience amid economic shifts. While core advertising remains robust, we are recalibrating our expectations to reflect the changing dynamics in interest rates, consumer sentiment, and media consumption," Ovadia explained.

The shift towards digital is underscored as traditional advertising channels lag behind. For instance, digital platforms, including Connected TV and Over-the-top media, are recognized as the fastest-growing segments, reflecting a rapid reallocation of budgets towards digital venues.

Political advertising, though reduced in a non-election year, still significantly impacts certain local markets due to special elections and gubernatorial races. This creates a competitive advertising environment that was particularly notable in 2024.

Growth is anticipated across several key sectors, with Real Estate expected to lead with a 9.3 percent increase, followed by Restaurants at 9.2 percent, and Retail at 6.8 percent. These sectors serve as crucial indicators of local advertising trends. Additionally, the Education and Automotive sectors are each expected to see a 5 percent increase in ad spend.

Rick Ducey, Managing Director at BIA, comments on the industry shifts. "Significant opportunities are emerging in the '3Rs'-Restaurants, Retail, and Real Estate. The automotive sector may see renewed vigor in marketing efforts as financing offers become more attractive with easing interest rates, and educational institutions are enhancing their digital outreach to engage cost-conscious students locally," Ducey noted.

As the landscape evolves, the focus intensifies on digital strategies to capture consumer attention effectively, marking a pivotal year for advertisers aiming to maximize reach and impact in a transforming market.

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