Local U.S. advertising will enjoy 6.4% growth in 2022, to reach $138 billion, following 9.9% growth this year — the strongest recovery seen since the Great Recession, according to Borrell Associates’ just-released 2022 Local Advertising Forecast.
The 2022 forecast is nearly two points higher than the CAGR that local advertising experienced between 2010 and 2020.
Streaming video/OTT is forecast to see the biggest gain — up 18.5%, to $21.3 billion — more than twice as large as broadcast TV advertising.
Other media expected to see large gains include audio/podcasting (17.8%), targeted banner advertising (12.6%) and broadcast TV (12.3%).
Media forecast for declines include radio (-4.6%), print directories (- 11.4%), newspapers (-6%), magazines and other print (-7.5%), and untargeted banner advertising (-4.6%).
Despite strong increases in 2021, nine of 17 different types of media advertising will not attain the levels they saw in 2019: cable TV, outdoor and cinema, all forms of print media, radio, and untargeted banner advertising.
Local TV is the only traditional medium projected to see 2022 spending levels exceeding those of 2019.
However, newspapers’ year-over-year local advertising decline in 2022 is forecast to slow to 6%. The newspaper industry has suffered double-digit declines for the past seven years.
The 2021 and 2022 forecasts reflect the pandemic’s effect of fueling local businesses’ investments in marketing through paid search, social media and streaming video, notes Corey Elliott, Borrell’s executive vice president of market intelligence and lead forecaster.
“SMBs were spending an average of 57% of their budgets on digital advertising prior to the pandemic,” he said. “They hunkered down in 2020 and 2021 and put a lot more into bottom-of-the-funnel marketing to drive business. As a result, we’re now seeing 65% of their budgets going to digital media, and forecasting that it will reach 67% next year.”
Mixed Bag by Markets
The advertising forecasts for many individual markets vary significantly from the national forecast due to factors including local impacts of COVID, business closings, state and local regulations and natural disasters.
Some markets have been devastated by business closings, while others have seen little damage or even enjoyed significant growth in new businesses.
A market’s rate of bounce-back in 2021 will dictate its advertising performance in 2022. Areas that built back faster in 2021 will see modest growth in 2022, while those still recovering this year “will see more explosive growth in 2022,” said Elliott.
For instance, Las Vegas is forecast to see local TV advertising expenditures rise at nearly three times the nationwide average of 12.6% next year, while Lake Placid, New York is forecast to see a 3.5% decline.
Biloxi, Mississippi is forecast to see a 38% gain in streaming video/OTT advertising next year, while other markets may see low single-digit increases.
National spot TV is projected to leap 26.3% in Springfield, Missouri, but dip by 2.9% in Oakland, California.
Cinema advertising is projected to increase 20.3% in Victoria, Texas, but decline by 9.3% in Blacksburg, Virginia.
Cable advertising is forecast to rise 29.3% in Corpus Christi, Texas, but drop 9.7% in Lincoln, Nebraska.
Newspaper advertising is forecast to rise 12.8% in Shreveport, Louisiana, but decline by 14.8% in San Francisco.