After giving a first look during a July webinar, BIA Advisory Services has updated and released its US Local Advertising Forecast, projecting $171 billion in total local media revenues for 2025. The burning question: of that total, what will radio receive?
The 2025 forecast marks a 5.5 percent increase in non-political advertising from the latest revised 2024 estimate. When including political advertising, the 2025 forecast predicts a slight decline of 1.3 percent from the $173.7 billion anticipated in 2024. This adjustment comes amid slower-than-expected growth due to macroeconomic factors influencing 2024’s local advertising expenditures.
As for radio, BIA predicts AM/FM might decline by 1.6% to $10.0 billion, making up just 5% of total ad spend. Conversely, radio digital is expected to grow by 4.2% to $2.9 billion, giving it around a 1.6% total share of US local ad revenue. Together, radio would carry a total 6.6%.
In that vein, BIA predicts for 2025 is that digital advertising will surpass traditional media for the first time, securing 52 percent of the total local advertising spend. Specific media segments poised for growth include PC/Laptop, CTV/OTT, Out-of-Home, and TV Digital, with digital platforms increasingly favored for their targeted advertising capabilities.
Excluding political, the top verticals for OTA radio spending in 2024 are investment and retirement advice, quick-service restaurants, and commercial banking. Next year, the verticals to watch are Restaurants (+9.5%), Real Estate (+6.7%), and Retail (+5.5%).
As for 2024, BIA now expects $11.7 billion in political advertising, a substantial increase from previous forecasts, reflecting a 21.3 percent rise from the 2020 general election cycle. This is driven largely by the Democratic switch from President Joe Biden to Vice President Kamala Harris. Unfortunately for radio, local television will capture the largest share of this spending, with Connected TV/Over-the-Top platforms also expected to benefit.
BIA VP of Forecasting & Analysis Nicole Ovadia said, “With macroeconomic conditions impacting 2024 local advertising spending, it has been slower than anticipated, and we’ve adjusted this year’s forecast. We’ve refined our projections for local advertising, both with and without political advertising, to better reflect anticipated overall media spend and to offer a view in the advertising marketplace from different perspectives.”
“We’re taking a nuanced view to shape our expectations. If the Fed adjusts interest rates as indicated, post-Q1 2025 or early Q2, and inflation cools and the labor market settles out, we anticipate some economic relief by mid-year. This will boost consumer confidence and, subsequently, increase media ad spend. While we’re optimistic, we’re also being cautious with our projections at this early stage.”
The 2025 US Local Advertising Forecast is accessible for BIA ADVantage clients with the nationwide forecast available for purchase directly through the company’s online store.
