CHANTILLY, Va.—The 2020 presidential election will help U.S. local advertising revenue reach new heights, a projected $161.3 billion to be exact, according to a recent report from BIA Advisory Services.
BIA’s “U.S. Local Advertising Forecast 2020” forecast would be a 5.8% growth rate from the $152.5 billion in ad revenue from 2019, with political ad spending helping to boost revenue. Where this revenue comes from is also seeing significant change, as BIA sees increases in ad revenue from OTT and social media, though traditional media will remain the biggest resource.
Traditional media is expected to account for $94.4 billion of the ad revenue in 2020, up from $93.2 billion in 2019, which would make up 58.5% of the total revenue. Online/digital revenue will see a larger growth, however, earning an estimated $66.9 billion in 2020, or 41.5% of the total revenue; it earned $59.3 billion in 2019. OTT and social media are big drivers for this increase.
BIA forecasts that $1.06 billion in local activated advertising will be spent on OTT in 2020, and that number will grow to $2.13 billion by 2024. For social, $29.5 billion will be spent in 2020, growing to $44.6 billion by 2024. Social media ad revenue primarily comes from mobile devices, with them currently representing a 93.8% total and an expectation to hit 96% by 2024, as mobile native/social is the fastest growing segment of mobile advertising at 13.9%.
As far as the specifics of political ad spending, BIA projects that $6.58 billion will be spent for the 2020 elections. Over-the-air will account for nearly half ($3.07 billion or 47%), but online digital will bring in about 22% ($1.42 billion) and even OTT is getting in on the action, with an estimated $51 million (0.8%).
“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 Mark Fratrik, chief economist and senior vice president at BIA. “Combine these factors with the ongoing growth of mobile and social advertising and the emergence and future significant advancement in over-the-top advertising, the revenue landscape for next year looks robust.”
The full “U.S. Local Advertising Forecast 2020” report is available on BIA’s website.