With no Olympics or significant political advertising dollars on the horizon in 2025 — and with local radio expected to be flat to down slightly — there’s opportunity in key verticals like restaurants and grocery, according to Nicole Ovadia, Vice President of Forecasting at BIA Advisory Services.
One key example, Ovadia said, is restaurants, which she expects to compete fiercely for value-focused customers. That means they’ll spend on local advertising, not only to let customers know about low prices, but for support with hiring due to the industry’s high-churn employment nature.
“Anybody who is turning on their radio or television is seeing the ‘meal deals,’ Ovadia said, citing recent campaigns from Burger King and Wendy’s. “Consumers are very price conscious right now. There’s a lot of talk about inflation, the cost of food, the cost of everyday items in America… The reason why we’re seeing this with QSRs is that consumers are willing to change brands. In 2023 and before, it was much more about taking those loyal customers and trying to get them to come in more frequently.”
BIA’s outlook calls for radio OTA spending in the restaurant vertical (including QSRs, full-service and special restaurants) to rise 5.8% to $635.1 million, with projected radio digital spending to climb 11.7% to $196.6 million.
Ovadia made her remarks at a webinar, “The 2025 Radio Revenue Outlook,” presented Thursday by Marketron and BIA. The panel also included Todd Kalman, Senior Vice President of Sales at Marketron. The event was moderated by Beth Osborne, Director of Marketing and Content at Marketron.
Kalman said the opportunity presented by restaurants calls for radio stations to be more proactive in providing guidance for restaurant managers and owners. “This category hit $1 trillion in sales [in 2024],” he said. “There’s definitely money there. There’s definitely room for creativity, and I think that we need to be the ones to bring out those ideas.”
Another vertical with potential upside for radio is grocery stores. BIA sees slight growth there in projected radio OTA spend (+0.3% to $351.3 million), with radio digital expected to rise 5.9% to $108.1 million. It’s a business that no doubt seeks to restore trust with many customers due to surging prices. The panelists noted that its digital strategy must be omnichannel and focus on sales points like lower prices, delivery options and offerings from loyalty programs.
“What is important for everyone to note is that people are checking prices,” Ovadia explained. “In the past, it was much more likely that you went to whatever local grocery store and bought what was there. But we’re seeing a lot more price sensitivity, checking around, and looking for other opportunities. A typical family will now visit more than one grocery store within a week in order to accomplish their shopping and save as much money or get as much value out of their dollar spent as possible… In 2025, this is a category to look out for radio.”
Local advertising will rise roughly 5.5% on a year-over-year basis to about $171 billion in 2025, excluding political, with $10 billion of that amount spent on over-the-air radio.
A key spending milestone will occur this year when local digital advertising spending (52%) will surpass traditional (48%) for the first time, according to BIA’s estimates.