New Report Prediction
Things are looking up for local advertising next year as the industry recovers along with the greater economy through 2021, according to the latest U.S. Local Advertising Forecast published by BIA Advisory Services today.
Local advertising revenue in the U.S. is poised to enjoy steady year-over-year growth of 2.5%, rising to $137.5 billion nationally, according to BIA—even without significant ad dollars flowing from political campaigns, which proved this year to be a major source of cash for otherwise hard-hit advertising media.
Of next year’s projected $137.5 billion in revenue, 22.7% is expected to come from direct mail and 17% each from mobile and online advertising; local TV and radio round out the top five, accounting for 11.4% and 9.2% of the total, respectively.
However, while that’s a solid uptick from 2020’s forecasted year-end total—$134.1 billion across all media—there is still a ways to go before the market fully recovers from the impacts of the pandemic.
“Although we are estimating an overall increase in total local advertising next year, we do not expect spending to recover to pre-COVID (2019) levels until 2022,” says Mark Fratrik, chief economist and SVP at BIA Advisory Services, who adds that the approval of a coronavirus vaccine will likely signal an economic rebound upon its anticipated distribution next year.
According to BIA’s forecast, linear media revenue will make up 55.3% of all local advertising in 2021 in line with traditional marketing’s year-over-year decline as it surrenders to digital, which is set to capture 44.7% of the U.S. total next year—a nearly 4% increase from its 2020 levels.
While digital isn’t as robust locally as it is globally, with many forecasts anticipating it will soon comprise the majority of all advertising tracked worldwide, its “lower costs, accountability and flexibility” all will continue to aid its growth at the local level, Fratrik says.
Over-the-top and connected TV are also favorites to grow in 2021, BIA forecasts, with the local broadcasting industry at large benefiting from improved targeting and inventory purchasing tools.
“We expect local audience share gained in Q2 and Q3 of 2020 will be maintained and expanded going forward, presenting a tremendous opportunity for the industry,” says Rick Ducey, BIA Advisory Services’ managing director.
As targeting capabilities advance, the analytics firm projects OTT will record 20% year-over-year growth in local broadcasting, jumping from $1 billion this year to $1.2 billion in 2021.