Local Advertising To Exceed $161 Billion In 2020
U.S. local advertising revenue is set to reach $161.3 billion in 2020, up from $152.5 billion in 2019. Local media analysis firm BIA Advisory Services’ forecast attributes this 5.8 percent year-over-year growth to political and over-the-top (OTT) advertising, as well as growth in mobile and social ads.
BIA’s figures point to traditional media revenue accounting for 58.5 percent of total local advertising in 2020 at $94.4 billion, increasing with the help of political spending from $93.2 billion in 2019. Online and digital revenue will grow to $66.9 billion in 2020, or 41.5 percent of total local media revenue, up from $59.3 billion in 2019.
“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,” says Mark Fratrik, chief economist and SVP at BIA Advisory Services. “Combine these factors with the ongoing growth of mobile and social advertising and the emergence and future significant advancement in over-the-top (OTT) advertising, and the revenue landscape for next year looks robust.”
Fratrik adds, “Political advertising will vary significantly based on the size of the market and specifics of local elections. As a point of reference, in each of the three top local political revenue generating markets (Los Angeles, California; Phoenix, Arizona; and Philadelphia, Pennsylvania), OTA television will near 47 percent of the political ad spend across the markets, with online/digital getting close to 22 percent of the political spend.”
BIA’s forecast also projects significant ad spending in native social advertising next year. Social media ad revenues from all forms of mobile devices now represent about 93.8 percent of total social ad spending and will grow to nearly 96 percent by 2024 as more user activity shifts away from desktops to portable devices. The mobile native/social segment of mobile advertising is the fastest-growing area, forecasted to grow 13.9 percent 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,” says 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. Plus, it will give local television stations the opportunity to increase their online revenue. We are tracking this and more in our 2020 forecast to help businesses more precisely understand where ad dollars are going and plan accordingly.”