The radio industry will continue to rebound from 2020’s advertising pullbacks next year, registering a second consecutive year of topline growth. Total radio revenues will climb to $13.54 billion next year, up 5.9% from $12.79 billion in 2021, according to BIA Advisory Services Local Advertising Forecast 2022, released today. That follows 16.0% growth in 2021 from the pandemic era low of $11.03 billion in 2020.While radio will put roughly $3.5 billion back on the books next year, it will still fall short of the $14.16 billion it did in pre-pandemic 2019.
Digital is helping radio get back to its pre-COVID levels. For the first time ever, the industry will haul in more than $2 billion in digital revenue next year, clocking in at $2.17 billion. That’s up 15.4% from $1.88 billion in 2021, and is more than triple the growth rate for over-the-air billings, which will rise 4.2% to $11.37 billion from $10.91 billion in 2021.
The one-two punch of faster-than-expected growth in digital ad sales and a strong political year have caused BIA to revise its total 2022 local advertising forecast upward. The financial advisory firm is now calling for the local ad market to come in at $173.3 billion, 7.3% higher than its estimate of $161.5 billion issued in late summer. That represents an 11.4% improvement over 2021. Once again, traditional media maintains a slight edge in the local ad marketplace at 50.8% of the ad spend, or $88 billion, compared to 49.2%, or $85 billion for digital media.
“2021 has been a year of fluctuations,” said Mark Fratrik, Senior VP and Chief Economist, BIA Advisory Services. “The first two quarters of the year saw strong growth, with some stalling in Q3 once the Delta variant appeared late summer. We’ve taken pandemic concerns plus inflation and supply chain issues into account to prepare our local media estimates and, overall, we are bullish on ad revenue for 2022.”
After years of stratospheric growth for mobile, it will grow slower than over-the-top, which will expand by 57.4% in 2022 as consumers continue to embrace various streaming services on their TV screens.
Mobile ($35.7 billion), direct mail ($33.4 billion) and PC/laptop ($32.1 billion) continue as the top three paid media channels for 2022. Local television has a not-too-shabby year ahead, poised to grow 28.4%, thanks to once again capturing a large share of political advertising.
In fact, total local political advertising will approach $8.4 billion in 2022’s midterm elections. Fairbanks, AK; Augusta, GA, and Tucson, AZ are the top three strongest political ad markets for television.
Radio execs have been talking about significant declines in automotive advertising and the new BIA forecast puts that in sharper relief. Out of BIA’s 12 main ad categories, automotive tumbled from the fifth position to the seventh position. The technology and leisure/recreation verticals each moved up one spot, mainly due to the decrease in local auto ad spending.
And strain around the retail industry pushed it from its longstanding perch as the top spending local ad category. The finance/insurance vertical is expected to usurp it as the top spender in 2022.
“Political spending is anticipated to be very large next year and other bright spots are surfacing that will affect ad revenue across the country for all media channels,” said Tom Buono, BIA’s CEO and Founder. “As we continuously track economic conditions, we realize it’s an ever-changing situation for local businesses, which affects their ad spend decisions. Except for restaurants and various retail categories, we anticipate most business verticals to exceed 2019 levels in 2022.”
Buono discusses more details about the economic underpinnings of the forecast in the latest company podcast, BIA’s Expectations for Local Advertising 2022: December Update, available for downloaded now.