Political and OTT Will Drive Ad Spend in 2020

For 2020 political and over-the-top (OTT) advertising, and growth in mobile and social ads, will be key ingredients for local media’s 5.5% growth from 2019.

BIA estimates total local advertising revenue in the U.S. will reach $161.1 billion in 2020, up from $152.7 billion this year. The split of who gets the most ad dollars traditional or digital media is close to even. Traditional accounts for 56% with digital at 44%. Traditional gets a boost to $90.1 billion, with the help of political spend. Online/digital revenue will grow to $71.0 billion in 2020.

“The expectation of an aggressive presidential election next year, along with primaries and state-wide races, indicate that political ad spending will be a serious driver of local ad revenue next year,” said Dr. Mark Fratrik, chief economist and SVP at BIA Advisory Services. “Combine these factors with the ongoing growth of mobile and social advertising and the emergence and future significant advancement in over-the-top (OTT) advertising, the revenue landscape for next year looks robust.”

Key findings from the forecast include:

  1. Over-the-Top (OTT) Locally Activated Advertising: $1.06 billion will be spent in 2020, doubling to $2.12 billion by 2024.
  2. Political Advertising: $6.59 billion will be spent in local political advertising in 2020. Most of the ad spend will be spread across:
    • Over-the-air (OTA) television: $3.07 billion (47 percent)
    • Online/digital: $1.42 billion (22 percent)
    • Cable: $919 million (14 percent)
    • Radio: $312 million (4.7 percent)
    • OTT: $51 million (0.8 percent)
  3. Mobile and social advertising: $29.5 billion will be spent on mobile in 2020, growing to $44.6 billion by 2024. Close to 40 percent of mobile spending will be tied to native social.

“Political advertising will vary significantly based on the size of the market and specifics of local elections,” said Fratrik. “As a point of reference, in each of the three top local political revenue-generating markets (Los Angeles-CA, Phoenix-AZ, Philadelphia-PA), OTA television will get close to 47 percent of the political ad spend across the markets, with online/digital getting close to 22 percent of the political spend.”

The forecast also projects significant ad spending in native social advertising next year. Social media ad revenues from all forms of mobile devices now represent about 93.8 percent of total social ad spending and will grow to nearly 96 percent by 2024 as more user activity shifts away from desktops to portable devices. The mobile native/social segment of mobile advertising is the fastest growing area, forecasted to grow 13.9 percent from 2019-2024.

“We’ve been carefully charting the growth of mobile and social to track its growing importance to national and local advertisers and its ability to precisely target and reach local consumers,” said Rick Ducey, managing director of BIA Advisory Services. “Now, we expect the emergence of OTT to grow quickly because it can deliver the type of targetability and tracking advertisers require today. Plus, it will give local television stations the opportunity to increase their online revenue. We are tracking this and more in our 2020 forecast to help businesses more precisely understand where ad dollars are going and plan accordingly.”

BIA’s U.S. Local Advertising Forecast 2020 provides nationwide total U.S. spending estimates for five years, along with individual media forecasts for 13 media, now including OTT. Details on how to purchase forecast are available here. Clients of BIA ADVantage can view the nationwide and local market(s) forecast estimates by logging in here.

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