Local Media Growth Expected, But Not Enough To Counter 2020 Declines

Borrell Associates has released its 2021 to 2025 forecast as well as revised numbers for 2020.

Local businesses are estimated to spend $127.3 billion in 2021 -- up 7.3% from the $118.7 billion spent in 2020. Typically, total local ad spending grows between 2% and 4%.

Increases seen this year, however, won’t be enough to wipe out all the losses felt in 2020. The advertising marketplace won’t grow larger than what was seen in 2019 until 2022.

Borrell estimates the local advertising marketplace shrank by $9.3 billion in 2020. Individual local markets saw failed businesses and a reduction in employees.

Not surprisingly, local online media is forecast to take 65.7% market share in 2021 -- up from 62.9% in 2020.

Local TV stations rank second, but market share has slipped to 7.4% 2021, down from 7.6% in 2020. Radio becomes number three with 5.4% market share, down from 5.5% in 2020.

In some markets, radio will grow by double-digit percentages, like 13% in Alfalfa, Oklahoma, and 17% in Evansville, Indiana.



Four of the 17 types of media analyzed will continue to see declines in spending. All are related to print media.

Newspapers, for example, will decline in market share to 4.4% in 2021 from 5.5% in 2021. Direct mail is the print-based media to hold steady at 4.9% market share, Direct mail ranks fourth in the largest type of media, behind online, TV, and radio.

Out-of-home holds steady at 2.6% market share. Cinema will grow to 1.0%, up from 0.9%.

As seen in Borrell’s numbers, the recovery emerges as uneven. Some local businesses will see variances due to changes in businesses' activity per area, meaning that some states and markets are opening more rapidly than others extending statewide lockdowns.

Automotive, restaurants, and real estate will gain more in 2021 compared with 2020. By 2025, streaming video advertising will become the second largest area, surpassing paid-search advertising, targeted banners, and social media.

Globally, the media continues to climb. Likely driven by the pandemic, global online video-service subscriptions topped one billion for the first time, according to a report from the Motion Picture Association (MPA) released Friday.

In the U.S., the MPA estimates online video subscriptions rose 32% to 308.6 million in 2020, compared with 2019, and market for home and mobile subscriptions rose 21% to $30 billion.

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