Two months into 2024, BIA Advisory Services has revised its US Local Advertising Forecast for the year – and it’s not good news for radio. In October, BIA predicted a tidal wave of local ad spending fueled by political revenue, but that flood may be diverting elsewhere.
The updated prediction calls for a 9.3% year-over-year increase in revenue across all media, reaching $172 billion. However, this marks a 2% reduction from the October data due to mixed economic indicators and slower consumer spending.
The updated forecast also shows an adjustment in local political ad spending projections, with an estimated $11.1 billion, a 15.5% increase from 2020.
Even less favorable for AM/FM and streaming audio is that the majority of the remaining growth is anticipated in ad spending for connected TV/over-the-top (CTV/OTT), TV over-the-air (OTA), and TV Digital. Television continues to dominate political ad expenditures, with a notable increase in CTV/OTT investments.
While expectations are tempered, it’s not all bad news. OTA Radio is still expected to show growth, albeit not at the same rate as the medium’s visual brethren. In the breakdown of traditional versus digital advertising, digital is projected to constitute 48.7% of the overall ad spend, amounting to $84 billion, while traditional media ads are expected to make up 51.3%, totaling $88 billion.
For radio sellers, its worth noting that the fastest-growing ad sectors past political are real estate and leisure/recreation. Real estate is especially worth watching in the latter half of the year as interest rates could start to decrease.
Conversely, health, general services, and automotive spend are expected to have the greatest decline, with auto not projected to return to pre-pandemic spending levels by at least 2027. BIA VP of Forecasting & Analysis Nicole Ovadia anticipates a surge in real estate advertising later in the year as interest rates potentially decrease, sparking activity in the market.
“As expected, local political advertising will be substantial this year, and it’s fueling spend across the media landscape,” said Ovadia. “Our slight adjustment down for this year is mainly due to mixed economic signals, a slowdown in certain consumer purchases, and lower than expected spending in Digital and Direct Mail advertising at the end of 2023 that may flow into this year.”
The full updated 2024 US Local Advertising Forecast is available to BIA ADVantage clients as well as separately on the BIA site.
