As Q2 earnings season comes to a close for radio, many broadcasters are looking for revenue relief after an admittedly frustrating quarter. Yet there is no respite in sight, according to BIA Advisory Services, which is making cuts to its 2025 local ad forecast.
BIA’s updated outlook now trims its earlier March projection by more than $2 billion for the US, with total local advertising revenue, including political, to reach $169 billion. This is a 2.4% year-over-year decline. Excluding political, the forecast is $168.2 billion, representing 3.7% growth over 2024 but down from March’s estimate of $171 billion.
The revisions contrast with March’s modestly optimistic update, which had nudged non-political ad revenue up 0.03% and total revenue, including political, up 0.1% from earlier estimates on the strength of digital growth. At that time, BIA projected a 6.1% increase over 2024, $171 billion, excluding political, and $171.4 billion including political, just 0.5% below the previous year’s politically boosted total.
The pullback reflects mounting economic pressures, including tariffs, high interest rates, and tighter credit, which BIA says are prompting businesses to be more cautious with ad budgets. “Ad growth has slowed down slightly as businesses implement more cautious spending strategies and optimize their channel allocations,” said BIA Advisory Services VP of Forecasting and Data Analysis Senan Mele.
In March, BIA projected that combined over-the-air and digital radio revenue would fall 4.9% year-over-year in 2025 when political spending is included. Without political advertising, the decline was expected to be a more modest 0.8%. Over-the-air radio was anticipated to drop 6%, while digital radio was set for a slight 0.1% gain. Those figures were already a downward revision from the company’s July 2024 forecast.
The August update, unfortunately, does not break out radio-specific numbers, but points to a steeper pullback in overall traditional media spend, with a $3.5 billion cut from prior projections. This suggests over-the-air radio’s losses could be even greater than portended in March.
A $855 million upward revision to digital media spending, meanwhile, may signal some stability or modest growth for digital radio, but not enough to offset over-the-air declines.. BIA estimates digital to represent 53.7% of all local ad spending, or $90.4 billion. Connected TV and Over-the-Top lead non-political growth at 29.3%.
Top-growing verticals have also shifted, as businesses feel the growing economic pinch.
In March, the fastest-growing ad categories were led by Real Estate (+9.3%), Restaurants (+9.2%), and Retail (+6.8%), with Education and Automotive each climbing 5.0%. By August, the growth leaders have shifted. Real Estate’s momentum has accelerated to +10.4%, Restaurants has cooled slightly to +7.8%, and Finance & Insurance (+4.0%) has replaced Retail in the top three.
Industries feeling the strain include Media (-2.2%), Healthcare to dip 0.5%, and General Services to edge down 0.3%.
Mele noted that despite the pullback, opportunities remain, especially with the holiday shopping season starting earlier.
BIA’s detailed forecasts for all local radio markets are available through its BIA ADVantage platform or for purchase directly through the company.
