U.S. Local Advertising Will Start to Rebound in 2021

BIA Advisory Services estimates total local advertising revenue across all media in the U.S. will reach $137.5 billion in 2021, up 2.5 percent year-over-year from $134.1 billion in 2020. Even without the presence of significant political advertising, BIA expects this increase will occur throughout 2021 as businesses adapt and rebound, and vaccines become readily available.

The $134.1 billion in 2020 is down 10% from $149.5 billion in 2019, despite the presence of an unprecedented amount of political advertising in 2020 ($7.8 billion), according to BIA’s forecast. BIA’s forecast shows the overall U.S. local advertising spend won’t return to pre-COVID (2019) levels until 2022.

“Although we are estimating an overall increase in total local advertising next year, we do not expect spending to recover to pre-COVID (2019) levels until 2022. The availability of a vaccine early in the new year will be a key factor to a much stronger year for almost all vertical advertising as the economy rebounds and consumers start moving around more freely and even going back into the office.”

– Dr. Mark Fratrik, SVP and Chief Economist, BIA Advisory Services

Although traditional media will still account for over half of total local advertising (55.3%), digital media’s share continues to grow. Digital media revenue will grow to $61.5 billion in 2021 to obtain 44.7 percent of total local media revenue, a share increase of 3.7 percent from 2020.

Direct mail will remain the top local ad revenue-generating media in 2021 with a 22.7% share of wallet. Mobile and online will be nearly tied at 17.0% each, accounting for more than one-third of all local advertising. Both over-the-air Television and Radio will remain in the top 5 media in terms of ad spend and percentage, despite the onslaught of digital competitors.

“This year saw a very strong shift into digital media for its lower costs, accountability, and flexibility. However, it also included substantially improved targeting, attribution, and ROI tools from broadcast TV, broadcast radio and MVPDs that cannot be ignored. Just as the pandemic had a significant effect on the local ad environment, it adjusted how we did our overall forecasting for 2021. Into the new year, we will continue examining the revenue-generating opportunities of linear plus digital media activations in our forecasting models.”

– Dr. Mark Fratrik, SVP and Chief Economist, BIA Advisory Services

The new kid on the advertising block, Over-the-Top (OTT), which grew in importance with consumers during the pandemic-driven shutdown, will continue to grow in 2021. OTT combines the targeted advertising opportunities of digital media with quality video programming associated with traditional media. BIA estimates OTT will grow from $1.0 billion in 2021 to $1.2 billion in 2021.

BIA’s U.S. Local Advertising Forecast 2021 is available to the firm’s BIA ADVantageTM subscribers. They can access the nationwide forecast and updated 2021 estimates for their local markets by logging into the ADVantage platform here. Details on how to purchase access to the U.S. Local Advertising Forecast 2021 are available here.

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