2023 Local Ad Forecast: Slight Overall Dip, 15% Drop For TV

Advertising revenue across local U.S. media will decline by 0.5% in the coming year, projects the latest forecast from BIA Advisory Services.

The projection, which spans 16 media and 96 sub-verticals, calls for $165.7 billion in total revenue. That compares to a final estimate of $166.5 billion for 2022, which was buoyed by heavy midterm elections ad spending.

When political advertising is removed from the estimate, BIA projects 2023 local advertising at $165.2 billion, which is 4.8% higher than 2022’s total sans political campaign spending.

The nearly flat revenue projection for 2023 reflects continued economic and supply chain concerns. However, the forecast is more positive starting mid-year.

The 2023 forecast shows digital continuing to gain on traditional media, growing to $81 billion, for a 49% share of overall spend, to traditional media’s 51% ($84 billion).

BIA has decreased its digital estimates slightly in the last two forecasting rounds because opt-in privacy measures on Apple and Android devices have had some impact on mobile advertising growth (although local is still projected to grow by 8.1% in 2023).

While TV digital and over-the-top (OTT) are forecast to grow 17.3% and 12.3% respectively in 2023, the lack of major elections and political campaigns will result in a 15% decline overall for local TV, to $18.5 billion (from $21.8 billion in 2022). In 2021, total local TV ad revenue was $17.2 billion.

When political advertising is removed from the comparison, the total local TV projection is $18.2 billion—up from $17.6 billion sans political spend in 2022, and $17 billion in 2021.

Local radio is forecast to drop by 3.6%, to $13.5 billion, from $14 billion in 2022 (the decline entirely attributed to the loss of political advertising in 2023).

The top three paid local media channels by ad revenue for 2023 are direct mail ($37.2 billion), mobile ($33.5 billion) and PC/laptop ($29 billion). 

However, direct mail’s growth has been slowing substantially due to rising costs and growth in digital advertising channels. Direct mail growth for 2023 is pegged at just 1.5%. 

Business verticals forecast to see ad revenue growth are education (9.7%), retail (8.7%) and restaurants (7.5%).

In addition to a 78% drop in political advertising, verticals forecast to see significant declines include leisure and recreation (-4.9%) and real estate (-1%) recent).

Automotive is projected to grow 4.9%, but not until the latter part of 2023.

“When it comes to advertising in the business vertical market, education offers a tremendous opportunity for local media in 2023, with companies offering opportunities for employees to improve their training and with people who are experiencing a job transition often enrolling in classes to advance their education,” noted Nicole Ovadia, vice president forecasting and analysis, BIA Advisory Services.

Other verticals are likely to show faster improvement if the Federal Reserve board slows or ceases interest rate increases and economic conditions improve, she pointed out, adding: “Even with the economy in flux, the continuing strength of the labor market and corporate profits makes me feel confident that key verticals will show growth in the year ahead.”

2 comments about "2023 Local Ad Forecast: Slight Overall Dip, 15% Drop For TV".
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  1. Todd Handy from SEBPO, November 30, 2022 at 12:51 p.m.

    MediaPost folks- looks like you're missing a decimal in your radio forecast, which reads, "Local radio is forecast to drop by 36%...".  3.6% should be the corrrect number with a $.5M decline on $14M.

    Thought you'd want to know.

  2. Karlene Lukovitz from MediaPost replied, November 30, 2022 at 2:10 p.m.

    Right you are. Decimal point missing. Fixed now. Thanks!

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