BIA Lowers Local Outlook, CTV Still Leads Growth

BIA Advisory Services has decreased its 2023 U.S. local advertising forecast estimate by 2.4%, to $161.7 billion, from its original estimate of $165.7 billion, citing a “mixed start” for the economy this year and “tempered” growth in digital advertising.

The updated forecast estimates that traditional media will earn $84 billion — unchanged from the original forecast — but the digital revenue forecast has been reduced to $78 billion, from $81 billion.

“After Meta, Alphabet and others lowered expectations for 2023, we examined local digital advertising spending revenues over the first six months of the year and determined a reduction was necessary,” said Nicole Ovadia, vice president, forecasting and analysis, BIA Advisory Services. “After years of double-digit growth, we are seeing some headwinds that will have a significant impact on digital local advertising.”

However, CTV/OTT is still projected to be the fastest-growing advertising channel, at 18.5%, with $2.4 billion in projected revenue. 

“Both linear TV and digital budgets are fueling the growth of CTV/OTT, as well as new dollars from publishers and aggregators that are using the channel to extend their programmatic platform to long tail businesses,” notes Rick Ducey, BIA managing director.

The top three projected local paid media advertising channels are direct mail ($37 billion), mobile ($32 billion) and PC/laptop ($28 billion). 

When the year-ago comparisons exclude the previous year's political advertising revenue, small increases are still projected for broadcast TV over-the-air/OTA (+0.2%), TV digital (+4.9%) and radio digital (+4.1%), though radio OTA comes in at -3.9%. When the comparisons include last year's political ad revenue, TV/OTA is projected at -18.4% for 2023, TV digital at -9.2%, radio OTA at -7.5%, and radio digital at +2%.

(BIA defines TV digital as including all digital advertising sold by local broadcast stations, excluding connected TV/over-the-top, including mobile apps search, social, owned and operated inventory and banner ads.)

Looking at subverticals, BIA expects growth in the auto category later this year, and has raised its projection for the new car dealers/automotive repair services tier.

Among other important local advertising verticals, BIA has also raised its projections for savings/credit institutions and other loan services, plumbers and HVAC, and realtors.

Subverticals that have had their estimates lowered include online gambling, office supplies and stationery stores, auto and direct property insurance, and health and personal care stores.

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