The BIA Advisory Services' Revised 2025 U.S. Local Advertising Forecast projects total local advertising revenue at $169 billion, reflecting a 2.4% year-over-year (YoY) decline compared to 2024.
This is a 1.5% reduction from BIA's earlier estimate of $171.4 billion. Key points include:
- Non-Political Revenue: Excluding political advertising, the forecast is $168.2 billion, a 3.7% YoY increase, though still lower than the prior $171 billion projection.
- Economic Pressures: The downward revision is attributed to economic challenges like weak consumer sentiment, tariffs (assuming a 10% baseline), high interest rates, and tight credit conditions impacting local ad budgets.
- Digital vs. Traditional Media: Digital media is expected to dominate, accounting for 53.7% of total ad spend ($90.4 billion), up by $855 million from prior estimates. Traditional media, including broadcast, will contribute 46.3% ($77.8 billion), down $3.5 billion from earlier forecasts, reflecting a shift to performance-driven digital channels.
- Growth in Specific Channels: Excluding political ads, Connected TV (CTV)/Over-the-Top (OTT) is projected to grow by 29.3%, PC/laptop advertising by 12.1%, mobile by 9.4%, TV digital by 3.7%, and Out-of-Home (OOH) and direct mail each by 1.6%.
- Vertical Performance: Fastest-growing ad categories YoY include Real Estate (+10.4%), Restaurants and Food (+7.8%), and Finance and Insurance (+4.0%). Declines are expected in Media (-2.2%), Healthcare (-0.5%), and General Services (-0.3%).
- Broadcast Challenges: The forecast highlights a shift from traditional broadcasting to streaming, with CTV/OTT capturing 73.6% of TV viewing, pushing broadcasters to adopt digital strategies to maintain audience and ad inventory relevance. However, traditional broadcast revenue, including radio, faces declines, with radio OTA and digital revenue projected to drop 4.9% (including political) or 0.8% (excluding political).
BIA Advisory Services estimates local radio ad revenue (OTA and digital combined) to reach $12.3 billion in 2025, a slight decline from earlier projections of $12.9 billion. This includes:
- Over-the-Air (OTA) Radio: Projected at $10 billion, with a nominal decline of 0.4% to 6% year-over-year (YoY) depending on political ad inclusion. Excluding political ads, the decline is more modest at 0.8%.
- Digital Radio: Expected to generate $2.3 billion to $2.9 billion, with a slight growth of 0.1% to 4.2% YoY, driven by sectors like real estate development (+15.8%), restaurants (+8.6%), and mattress/sleep centers (+7.2%).