BIA Advisory

Driven in part by billions spent on political ads, local advertising revenue in the U.S. will jump 5.8% to $161.3 billion in 2020, up from $152.5 billion this year. By a roughly 60-40 split, traditional media will grab the majority of local ad dollars next year, even as digital media billings grow at a faster pace. Traditional media outlets are forecast to bill $94.4 billion in local business in 2020, up from $93.2 billion in 2019. Online/digital revenue will grow to $66.9 billion, up from $59.3 billion in 2019.

The fresh numbers are from the newly released U.S. Local Advertising Forecast 2020 from BIA Advisory Services. The local media research firm forecasts a mostly flat year for local over-the-air radio revenues, clocking in at $12.8 billion. Factor in another $1.5 billion in online/digital efforts, and broadcast radio stations will generate $14.3 billion in local revenues. A chunk of that, of course, will come from robust local political ad spending in what is shaping up to be another unprecedented presidential election. BIA estimates radio will pull in $312 million in local political ad dollars in 2020, or 4.7% of the total $6.58 billion election booty. Over-the-air television will once again attract the lion’s share – $3.07 billion or 47%. Online/digital will cordon off less than half of that – $1.42 billion or 22%. Cable is next with $915 million or 13.9%, followed by radio and then over-the-top locally activated advertising with $51 million (0.8%).

“The expectation of an aggressive presidential election next year, along with primaries and state-wide races, indicate that political ad spending will be a serious driver of local ad revenue next year,” Mark Fratrik, Chief Economist and Senior VP at BIA Advisory Services, said in a news release. “Combine these factors with the ongoing growth of mobile and social advertising and the emergence and future significant advancement in over-the-top advertising, and the revenue landscape for next year looks robust.”

As with any political ad forecast, your mileage may vary. Fratrik says election dollars “will vary significantly based on the size of the market and specifics of local elections. Local media outlets have the most to gain in each of the three top local political revenue generating markets: Los Angeles, Phoenix and Philadelphia.

Beyond political, BIA forecasts major growth next year for over-the-top locally activated advertising, mobile and social advertising. Local ad spending on OTT will reach $1.06 billion in 2020, before doubling to $2.13 billion by 2024. Some $29.5 billion will go to mobile in 2020, leaping to $44.6 billion by 2024. Nearly 40% of mobile spending will be tied to native social.

Social media ad revenues from all forms of mobile devices now represent about 93.8% of total social ad spending, BIA says. That will grow to nearly 96% by 2024 as more user activity shifts away from desktops to portable devices. Indeed, the mobile native/social segment of mobile advertising is the fastest growing area, forecast to grow 13.9% from 2019-2024.

“We’ve been carefully charting the growth of mobile and social to track its growing importance to national and local advertisers and its ability to precisely target and reach local consumers,” said Rick Ducey, Managing Director of BIA Advisory Services. “Now, we expect the emergence of OTT to grow quickly because it can deliver the type of targetability and tracking advertisers require today.” In addition, the burgeoning OTT channel will give local television stations the opportunity to increase their online revenue, Ducey adds.

BIA’s U.S. Local Advertising Forecast 2020 provides nationwide total U.S. spending estimates for five years, along with individual media forecasts for 13 media, now including OTT.