With local economies reopened for business and ad spending accelerating, BIA Advisory Services has revised its 2021 forecasts. The firm is now calling for U.S. local advertising revenues to reach $142.4 billion this year. That’s up $4.8 billion, or 3.9%, from its November 2020 estimates.
BIA’s revised forecast says local radio advertising will rebound somewhat to $11.7 billion in 2021 and to $12.3 billion in 2022. Digital will deliver $940 million in radio industry revenues in 2021 and $1.04 billion in 2022.
“There’s an acceleration in the market that couldn’t be accounted for last fall,” says BIA’s Senior VP and Chief Economist Mark Fratrik. “The economy is growing and we’re observing money being spent to reach audiences through various media.”
Although traditional media maintains a lead over digital in the new numbers, the gap is narrowing. Traditional will capture 54% of the pie, or $77.7 billion, this year. That’s $1.6 billion higher than BIA’s November 2020 estimate. Digital will command 46%, or $64.7 billion, which is $3.2 billion above the earlier outlook. Digital encompasses mobile, online, over-the-top, email, and traditional media’s online ventures.
While mobile has been the “it” media in digital for the past several years, in 2021 that distinction goes to over-the-top. OTT video will rocket up 16% this year, surpassing the trajectory of mobile as more consumers take advantage of various streaming services on their TV screens.
Local television advertising, in turn, will dip to $16.2 billion in revenue this year but bounce up to $19.3 billion in the mid-term election year of 2022. Digital will put $1.5 billion in local TV’s coffers in 2021 and $1.7 billion next year.
The growth in ad spending is likely to continue over the next few years. BIA’s revised forecast anticipates a 5.6% increase in overall compound annual growth in U.S. spending in local ad markets. It expects the amount to reach $157.1 billion in 2022 and $162.1 billion in 2023.Traditional media will retain its edge over digital next year, before digital media pulls ahead to 51% by 2023.