Projected advertising revenues across all local media in the U.S. will reach $171 billion in 2025, according to BIA Advisory Services’ latest U.S. Local Advertising Forecast.
That’s an increase of 5.5% in non-political spending over BIA’s revised 2024 local ad estimate. Including political advertising, the 2025 outlook represents a 1.3% drop from the revised estimate of $173.7 billion for 2024.
Meanwhile, local OTA radio revenues are forecast to reach $10.71 billion, a 1.8% year-over-year gain from $10.52 billion in 2023. Digital radio is seen rising 1.9% to $2.88 billion, up from $2.83 billion a year ago.
“With macroeconomic conditions impacting 2024 local advertising spending, it has been slower than anticipated, and we’ve adjusted this year’s forecast,” said Nicole Ovadia, VP of Forecasting & Analysis, BIA Advisory Services. “We’ve refined our projections for local advertising, both with and without political advertising, to better reflect anticipated overall media spend and to offer a view in the advertising marketplace from different perspectives.”
The recent forecast update shows a small increase in expectations for local political advertising in 2024. BIA now projects $11.7 billion in spending this year, up $560 million from its previous estimate in March. This political spending estimate represents a significant increase of 21.3% over the last general election in 2020.
Local TV continues to get the largest share of the spending. At the same time, the firm projects that Connected TV/Over-the-Top (OTT) will receive much of the additional political ad dollars added to the mix.
For 2025, Ovadia offered a nuanced view: “If the Fed adjusts interest rates as indicated, post-Q1 2025 or early Q2, and inflation cools and the labor market settles out, we anticipate some economic relief by mid-year. This will boost consumer confidence and, subsequently, increase media ad spending. While we’re optimistic, we’re also being cautious with our projections at this early stage.”
In 2025, BIA’s forecast shows digital’s share of total local advertising is greater than traditional media’s share for the first time. Digital ad revenue will get 52% of the overall advertising spend ($89 billion) vs. traditional ad revenue, expected to account for 48% of the ad spend ($82 billion).
Said BIA Managing Director Rick Ducey: “In previous forecast rounds, we reported robust growth in CTV/OTT, but different factors have led us to moderate expectations around the speed of that growth. One factor is that while streaming viewing is growing, there’s less available ad minutes in streaming vs. linear TV. However, this channel continues to present valuable opportunities for advertisers due to how it combines the power of premium TV with the precision of digital audience targeting. Political and issue campaigns are tapping into this capability, and it will be interesting to unpack the use cases and outcomes.”
Key vertical categories for 2025 cited by BIA include restaurants (+9.5%), real estate (+6.7%) and retail (+5.5%).
“Restaurants, Real Estate, and Retail — we’re referring to them as the Three Rs of 2025 — are ripe for expansion, and they all tie back to local advertising and media in meaningful ways. We’ll be keeping a close eye on opportunities in both traditional and digital ad spend across these verticals,” Ovadia noted.
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