Tuesday, October 12, 2021

BIA: Radio 5th Among U-S Ad Spend Categories

BIA Advisory Services forecasts that for the first-time mobile advertising spending will surpass direct mail as the top media advertising platform in 2022, reports TV News Check.  

As revealed in BIA’s U.S. Local Advertising Forecast 2022, the overall local U.S. advertising market is expected to reach $161.5 billion – a 10.1 percent YoY growth — buoyed by overall strong economic tailwinds coming out of 2021. The forecast says that traditional media revenue will account for $84.6 billion and digital media will be close behind at $76.8. BIA also anticipates $7.5 billion of the sum will come from political advertising during a strong election season.

“For a long time, we’ve been talking about direct mail as the king of the share of wallet in local ad spending,” said Rick Ducey, managing director of BIA Advisory Services. “This coming year, for the first time, we pass the crown over to mobile, as its momentum drives it to be the biggest overall piece of the spending wallet – and we expect that to continue in the foreseeable future.”

BIA puts mobile spending at 21% of the 2022 forecast and direct mail at 20.7%, but the gap between the two will continue to widen.

Overall, digital ad spending will reach $76.8 billion, with Google and Facebook controlling over half of the spending. Google takes the lion’s share at $26.8 billion, compared with Facebook’s $14.3 billion.

Ducey points to four reasons mobile has become the No. 1 advertising medium:

COVID’s impact on consumer’s increased time spent with mobile and other digital media making digital the place to find and target consumers.

Digital’s overall momentum in winning more revenue share of media time from traditional media.

The rise of virtual consumer channels like delivery, curbside pickup and ecommerce in top categories like retail, restaurants, CPG where physical channels like retail store visits decline.

Mark Fratrik, senior vice president and chief economist at BIA, says, that the firm’s U.S. Local Advertising forecast also sees a rise in local radio advertising revenue in 2022 and is expected to generate $12.7 billion split between over-the-air ($11.0 billion) and digital ($1.7 billion). By 2026 radio digital revenues are expected to reach $2.4 billion, while OTA goes up and down with the even political years and ends at $11.7 in 2026.

“Radio isn’t faring as well as local broadcast TV, and it doesn’t get the same bump as TV in political years,” said Fratrik. “But it is getting close to its pre-pandemic levels as people continue to return to work commutes and traveling by car.”

“I like to refer to our data on local television as our ‘piano key graphs,’ because during even political years it is very apparent that the advertising revenue will rise and then dip the following year.”

As reported in late September, BIA forecasts local television in 2022 will rise to $19.3 billion in OTA advertising, and $1.7 billion in digital; a sign of a strong $21 billion industry that delivers its audience for political campaigners.

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