CHANTILLY, Va—U.S. local advertising revenue is expected to rise 6.1% in 2025, driven mainly by spending on digital media, according to a new report from BIA Advisory Services.
Without major political campaign spending or the Olympics, BIA is still optimistic about the local ad outlook, predicting that it will reach $171 billion. When political advertising is included, the total estimated spend of $171.4 billion will be a slight decline of 0.5 percent below 2024, given last year’s relatively large political spend, which BIA tagged at $11.7 billion.
The numbers line up with BIA’s original forecast for 2025 last summer, but the updated forecast shows slight adjustments to previous estimates for 2025, with advertising revenue (excluding political) adjusted up by 0.03 percent from the last forecast and total local ad revenue, including political spending, adjusted up by 0.1%.
“Our latest forecast indicates that local advertising is showing resilience, despite the ongoing changes in the economic landscape," said Nicole Ovadia, VP of Forecasting and Analysis at BIA Advisory Services. "Although we expect core advertising to remain stable, we've adjusted our outlook to account for various market factors like interest rates and consumer sentiment and significant changes in media consumption patterns that are driving digital growth."
Key Findings:
- Digital transformation is accelerating rapidly: Traditional advertising channels show weaker performance metrics, while digital platforms surpass growth expectations. This trend indicates a faster-than-anticipated shift in advertising allocation strategies.
- Growth Platforms: Due to political advertising, there were more crowd-outs in 2024, so TV Digital grew faster than anticipated. Connected TV/Over-the-top is still the fastest growing overall as local advertisers continue to embrace this media.
- Political Impact: Despite being an off-election year, 2025 will see significant political advertising activity in key local markets affected by special elections and gubernatorial races.
The forecast indicates strong growth in several sectors: Real Estate at 9.3 percent, Restaurants at 9.2 percent, and Retail at 6.8 percent. These three sectors are critical indicators of local advertising activity and trends. The Education and Automotive verticals are also experiencing substantial growth, with increases of 5.0 percent each.
"Key verticals are showing notable shifts in 2025," said Rick Ducey, Managing Director at BIA Advisory Services. "While what we term the '3Rs'—Restaurants, Retail, and Real Estate—lead growth, we see interesting opportunities in Auto and Education. Auto dealers are likely to revive aggressive financing promotions when interest rates ease, and educational institutions are increasing their digital presence, particularly through geo-targeted campaigns, to connect with price-sensitive students who might not have considered nearby educational options before."
Rick Ducey will be a featured panelist on the TV Tech Leadership Summit next week. Click here to register for the free event.
