CHANTILLY, Va.—The local advertising market looks different than it did at the start of 2020 because of the coronavirus, and BIA Advisory Services is readjusting its revenue projections as a result. After initially estimating a total revenue of $161.3 billion back in November 2019, BIA now projects the 2020 numbers to be $144.3 billion, a drop of 10.6%.
Local television, and local radio, have been heavily impacted by decreased ad spending by leisure & entertainment, restaurants, retail companies and sports cancellations. For local over-the-air TV, BIA decreased its estimated revenue for the year by $800 million ($17.8 billion to $17 billion); it projected the same loss for cable ($6.4 billion down to $5.6 billion). For online platforms, including TV online advertising and OTT advertising, the drop is estimated to be less significant, but still $100 million less each.
“A realistic view of the virus is that it will continue to have a negative impact on the second quarter, with some continuation into the third quarter,” said Mark Fratrik, senior vice president and chief economist, BIA. “We have assumed that there will be a strong rebound in the latter part of the year, but we will have to re-evaluate as the on-going economic impact becomes clearer.”
That rebound could come in the form of political advertising as the U.S. general election will take place in early November. These political ads are expected to soften the revenue decrease for local cable and local OTA TV stations compared to other media.
Related, many organizations, like NAB, and members of Congress have been pushing for federal advertising dollars to go to local media stations to help them continue to operate amid this loss in traditional advertising revenue.
As far as how to best move forward among the current uncertainty, BIA CEO and founder Thomas Buono says that media groups can focus on three key areas: preserving liquidity, emphasize and manage relationships and think forward as a team.
BIA is offering detailed local ad market revenue forecasts for 210 TV markets, along with a COVID resource area, through its BIA ADVantage platform.
For more information, visit www.bia.com.
