- Local advertising revenue in the U.S. will rise 5.8% to $161.3 billion next year as media ad spending ramps up for elections, including the presidential race, according to a forecast by BIA Advisory Services shared with Marketing Dive. Traditional media revenue will make up 59% of total local advertising at $94.4 billion, a gain of 1.3% from $93.2 billion this year.
- Digital ad revenue is set to grow 13% to $66.9 billion next year to make up the remaining 41% of local media spending. Political ad spending in local media channels will reach $6.58 billion, spread among over-the-air TV (47%), digital (22%), cable (14%), radio (4.7%), and over-the-top TV (0.8%).
- Looking ahead, over-the-top (OTT) local ad revenue is predicted to double to $2.13 billion by 2024 from $1.06 billion next year. Mobile and social ad sales will climb 51% to $44.6 billion in 2024, when about 40% of mobile spending will be tied to native social, from $29.5 billion next year, per BIA.
BIA's forecast for local ad revenue indicates that political spending will magnify several recent shifts in how marketers spend their media dollars. Looking further ahead, it also indicates how the landscape is shifting more investments toward digitally oriented channels like social, mobile and OTT. Ad revenue growth for digital media will outpace traditional channels, with pronounced gains in social media that's almost completely dependent on mobile devices.
Nearly 94% of social media revenue will come from mobile devices next year, a percentage that will rise slightly to 96% by 2024 as audiences continue to shift their media consumption from desktops to portable devices, per BIA. Native ads on social media will be the fastest-growing segment of mobile advertising, rising 14% a year until 2024, the firm predicts.
The company's report also highlights the growing importance of OTT advertising as audiences shift their viewing habits to ad-supported streaming media platforms like YouTube, Hulu, Sling TV, Roku and services that launch next year like NBCUniversal's Peacock. BIA's forecast echoes recent estimates by researcher eMarketer, which this week projected that connected TV (CTV) media spending in 2019 will surge 38% to $6.94 billion, a figure that includes national ad campaigns. The firm estimated that CTV ad spending will surge to $14.1 billion by 2023.
BIA's forecast for local ad revenue also confirms other estimates of next year's surge in political advertising, especially in what is expected to be a hotly contested presidential race. Marketers will face greater competition for audience viewing time from campaign and issue advocacy ads, with political ad spending forecast to surge 57% to $9.9 billion next year from $6.3 billion in 2016, WPP's ad-buying unit GroupM previously said.
The outlook for political spending on social media is shifting as Twitter's ban on political advertising goes into effect on Nov. 22, while Google is considering changes to its political ad policy, The Wall Street Journal reported. Facebook has said that it will accept political ads, and now is weighing whether to change its policy to make them more transparent to users, CNN reported.
It's still unclear how Google and Facebook's possible changes to their political ad policies would affect ad inventories for marketers.