Wednesday, November 30, 2022

BIA '23 Forecast Calls For Flat Revenues

In its newly released 2023 U.S. Local Advertising Forecast, BIA Advisory Services estimates revenues across all media in the U.S. will reach $165.7 billion in 2023, a decline of 0.5 percent from the firm’s final estimate of $166.5 billion for 2022. 

Removing political advertising revenues from the estimate, BIA projects $165.2 billion in total local advertising next year, a 4.8 percent increase in local advertising year-over-year. The almost flat revenue projections for the year indicate continued economic and supply chain concerns, yet the forecast is more bullish starting mid-2023. 

Local radio revenues – broadcast and digital -- are projected to decline from $14 billion in 2022 to $13.5 billion in 2023. The slippage is due to the loss of midterm political revenue next year; the number is flat at $13.5 billion when political revenue is removed from 2022’s number. 

Local Radio (Radio OTA + Radio Digital)$13.4 billion (2021)
  • $14.0 billion (2022)
  • $13.5 billion (2023)

Local Radio (Radio OTA+ Radio Digital excluding political)$13.3 billion (2021)
  • $13.5 billion (2022)
  • $13.5 billion (2023)

Local TV advertising revenues are expected to fall 15% in 2023 to $18.5 billion from $21.8 billion in 2022, according to BIA Advisory Services 

The drop also  reflects record spending on political advertising during the 2022 midterm elections. In 2021, total local TV ad revenues were $17.2 billion.

“This year has been filled with contrasting economic indicators creating several challenges for the local advertising marketplace,” said Nicole Ovadia, VP Forecasting & Analysis, BIA Advisory Services. 

“Supply chain issues continued to plague the first couple of quarters of 2022 making it difficult for local media sellers. In the summer, we had higher hopes for the remainder of the year; however, inflation issues and recession fears started to set in and that stalled anticipated rebounds in key verticals such as automotive.”

“For our 2023 forecast we lowered near-term expectations to reflect the current economic climate that we anticipate will stay with us into next year.”

The 2023 forecast shows digital continues to gain on traditional media, growing its share to 49 percent of the overall advertising spend at $81 billion.  Traditional media ad revenue is 51 percent of the ad spend at $84 billion. BIA has been slightly decreasing its digital estimates over the last couple of forecasting rounds because of opt-in privacy measures on Apple and Android devices that have slightly impacted mobile advertising growth. 

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