It is absolutely amazing to me that we are at the end of October already. Things here at BIA have been quite busy the last few weeks as we were feverishly working to publish our latest forecast updates in time to help with the budget prep that we know is going on for 2024 right now at stations, agencies and businesses throughout the country.
And we also know that planning for the future can be scary, which is why I want to talk about two important 2024 forecast numbers that we just published to try to ease fears…
First, I’ll discuss Political spending, with a focus on CTV/OTT spending. Secondly, I’m going to talk about the darkest vertical of them all right now – Real Estate! So, on this Halloween Eve, let’s dive into some scary places and shine some light on what’s going on.
Political is a vertical that instills fear in many due to its size, dominance and volatility.
In our updated forecast, BIA has reduced our expected Local Political forecast for 2024 to $11 Billion. This is down about $500 Million compared to our previous forecast that was published earlier this year in June.
Why the reduction? Well, mostly due to how the Republican Primary is shaking out. In the early Summer, it was looking like the Republicans were headed for a heated and lengthy Primary season in order to select their nominee but that’s not how things seem to be going. Mike Pence has already dropped out and we expect more announcements like his in the coming weeks. Ultimately, it now looks like Donald Trump will secure the Republican nomination well before Super Tuesday, which means there will be less spending related to the Republican primary and, therefore, less spending overall.
But what is truly frightening is the CTV/OTT projections for the 2024 Political season.
Compared to 2024, we are projecting CTV/OTT Political spending in 2024 will be up about 750% to just over $630 Million. Wow. In 2024, we are expecting total spending on CTV/OTT to be about $3.1 Billion which means 20% of the entire year’s spending will be on Political. What is driving this growth? Well, it’s actually two things – one positive and one negative.
On the positive side, we are seeing demand for Political CTV/OTT advertising increase due to a growing number of candidates and interested parties using the medium. CTV/OTT is being used by local candidates that want to be able to target their potential voters in specific zip codes and voting areas without all the “waste” of linear TV and other media.
But the other reason why Political will be such a large chunk of CTV/OTT next year is the waning demand by non-Political advertisers. CTV/OTT continues to be among the fastest growing media, but it is not growing as quickly as it once was. Content is important to advertisers and there are growing concerns about the quality of content surrounding the seemingly endless supply of CTV/OTT impressions. 2024 should be a good year for CTV/OTT because Political will gobble up many of these impressions but it will be interesting to see what happens in 2025.
One thing that can’t and won’t wait for 2025? Real Estate’s recovery! It has been a rough couple of years for this vertical. When the pandemic hit, we saw unprecedented levels of movement – people moved locations, housing prices in many markets started to take off while other markets started to tank, the economy started to heat up, the Fed started to raise interest rates and then demand for Real Estate began to dry up. At a time when the economy was on fire and people were spending money on luxury items and vacations, it was getting harder and harder to buy or sell a house.
And now here we are in 2023 and things are very bleak for the Real Estate industry. 30-year mortgage rates are at over 7.75% and continue to rise while housing prices are starting to come down a bit. And this speaks to the main issue plaguing this sector: supply. Most people who are selling a home need to buy a new home but, right now, they are locked into a nice, low mortgage rate and, therefore, they may want to move or upgrade or downsize their home, but they are reluctant to make a change because the interest rate for their new home loan will skyrocket compared to where they are today.
Sounds pretty scary for anyone in Real Estate, right?
Actually, I believe this is an opportunity, which is why BIA is forecasting Real Estate advertising spending to be up nearly 17% in 2024 (an increase of $775 Million+ over 2023). This supply issue is addressable with advertising. Interest rates are temporary and always changing. Real Estate cannot wait for the Fed to take down rates. Therefore, we expect this sector to increase spending in the next year encouraging people to buy/sell/move now and renegotiate their adjustable mortgage rates later (which can be scary, too!)
So, during this Time of Mischief, I am choosing to look ahead to 2024 and plan for opportunity. There are a lot of scary uncertainties on the horizon but, with proper planning and preparation, we can head into next year ready to take advantage of whatever lurks in the shadows.