BIA Revised 2025 Outlook: $169B In U.S. Local Advertising, 2.4% YoY Decline.

BIA Advisory Services has updated its 2025 U.S. Local Advertising Forecast, now projecting total local ad revenue of $169 billion this year, a 2.4% decline vs. last year.

This revision, released Wednesday, marks a 1.5% drop from the firm’s earlier estimate of $171.4 billion. When political advertising is excluded, the revised forecast stands at $168.2 billion, a 3.7% year-over-year increase. However, this is still down from the previous non-political projection of $171 billion.

The downward revision reflects mounting economic pressures on local ad budgets, driven by factors such as weak consumer sentiment, tariffs, elevated interest rates, and tight credit conditions. The forecast also accounts for an assumed 10% baseline tariff environment as well as advertisers’ budget adjustments.

“Following a solid performance in 2024, driven by significant political advertising and spending from key sectors such as Legal Services, Healthcare, and Quick Service Restaurants, we are now noticing a shift in the advertising landscape for 2025,” Senan Mele, VP of Forecasting and Data Analysis, says in a news release announcing the revised forecast. “Ad growth has slowed down slightly as businesses implement more cautious spending strategies and optimize their channel allocations. This change underscores the necessity for agility in responding to the rapidly evolving economic environment.”

Within overall local ad spending, BIA has increased its digital media outlook by $855 million for the year, underscoring the growing dominance of digital channels in the advertising space. Digital media is now expected to represent 53.7% of total local ad spending, reaching $90.4 billion.

Meanwhile, traditional media is seen contributing 46.3% of total ad revenue, totaling $77.8 billion, a $3.5 billion decline from earlier estimates. The drop, BIA says, reflects advertisers’ increasing focus on lower-funnel, performance-driven channels and the continued fragmentation of the media environment.

Excluding political, several media categories are expected to show growth. Connected TV (CTV) and Over-the-Top (OTT) advertising are forecast to grow 29.3%. PC/laptop advertising is set to rise by 12.1%, while mobile advertising will expand 9.4%. TV digital advertising is projected to rise 3.7%. Modest growth is also expected in Out-of-Home (OOH) and direct mail, each increasing 1.6%.

“The impressive growth of CTV and OTT services from 2024 to 2025 is largely attributed to ad-supported platforms now capturing 73.6% of TV viewing,” BIA Managing Director Rick Ducey says. “This transition from traditional broadcasting to streaming reinforces the business case for TV broadcasters to implement CTV/OTT strategies, enabling them to reclaim audiences and enhance their targetable ad inventory. However, despite increasing viewership and advertising spending, streaming providers face significant challenges in achieving profitability in a fragmented market.”

BIA’s local ad forecast, which also offers insights into ad spending by local verticals, expects the top three fastest-growing categories (YoY) to include Real Estate (+10.4%), Restaurants and Food (+7.8%) and Finance and Insurance (+4%), with the biggest YoY declines coming in Media (-2.2%), Healthcare (-0.5%) and General Services (-0.3%).

“Despite the challenges faced by the media sector, there are promising opportunities this year, particularly with the holiday shopping season expected to kick off in early November,” Mele says. “This extended timeframe allows for a more strategic approach to targeted advertising. We’re excited to explore these trends further and provide our clients with insights that can help them capitalize on the growth in fast-growing categories while also navigating the declines.”