How Will the Local Advertising Market End This Year?

BY Kathy Crosett
localadvertisingmarket

The local advertising market outlook for 2025 has been slightly revised by BIA. Earlier this year, BIA analysts projected total local media spending of $171 billion (excluding political) for 2025. The new projection of $168.2 billion reflects a 1.5% drop from the previous estimate. However, the total spending will likely be 3.5% higher than last year and offer growth opportunities for media sellers.

Factors Contributing to Revised Media Spending

BIA conducts a proprietary local broadcast media survey every year. In producing their forecast, the company’s analysts take macroeconomic trends into account. For example, this year, both tariffs and interest rates are impacting local ad spending.

The key findings in this year’s survey reveal that digital advertising will account for 53.7% of the local advertising market in the U.S. This spending level is a 1% increase over the previous estimate. The 46.3% that goes to traditional media represents a 4.3% drop from the previous estimate.

What formats will attract the most ad money from marketers?

  • Mobile $39.6 billion
  • Direct mail $36.8 billion
  • PC/​Laptop $32.1 billion
  • TV OTA and Digital $16.3 billion
  • Radio OTA and Digital $12.2 billion

The mobile spending includes social media. And while mobile spending will grow over 9% in 2025, CTV/​OTT spending will likely experience the largest local ad spending growth at 29.3%.

A few traditional categories will continue to see their market share shrink. Print newspaper advertising will drop to 3.1% of the total local spending. And print directories will decline to 0.1%.

Advertisers continue to show their interest in local video with an anticipated spending level of $31.9 billion. Local TV will account for $16.3 billion, and local CTV/​OTT may capture $3.3 billion. That’s a big jump from the $2.6 billion spending level in 2024. In this calculation, BIA also includes local PC/​laptop ($4.9 billion), local mobile video ($3.6 billion), local cable ($2.3 billion), and out-​of-​home video ($1.5 billion).

Strong Categories for TV Advertising

Legal services remain one of the biggest categories for local TV ad spending. This year, around $1.8 billion will be spent. And automotive will present another opportunity for local media sellers with $813.4 million coming from Tier II or regional associations and $701 million from Tier III or local dealers.

Overall, the automotive sector will amount to 14.5% of the local TV OTA. TV media sellers can also find opportunity in the following sectors which are expected to be strong buyers in the local advertising market:

  • Retail 11.2%
  • Health 11.6%
  • Leisure/​Recreation 9.2%

CTV/​OTT Advertising Outlook

With local OTT/​CTV advertising spend poised to jump 7.3%, to $3.3 billion this year, media sellers must be ready to pitch their space. BIA analysts see the top categories in the space as:

  • Legal services
  • Hospitals
  • Supermarkets/​Grocery stores

Selling to Supermarkets/​Grocery Stores

When it’s time to pitch your grocery store/​supermarket accounts on the benefits of OTT advertising, refer to AudienceSCAN data from AdMall. Over 50% of U.S. adults visit their local grocery store twice a week. In the past 30 days, 44% of these consumers took action as a result of seeing a streaming TV ad. And 32% of these consumers watch between one and three hours of TV every day, giving your accounts plenty of opportunity to reach them. Even better, nearly 35% bought the product or service they saw in the OTT ad.

Martindale-​Avvo analysts encourage law firms to use an omnichannel approach to expand awareness of their services. In particular, video allows law firms to humanize their services. Whether the video is posted on social media or runs on OTT, law firms can educate potential clients with educational content.

Local Ad Spending by Hospitals

Consumers in the local market need to know about the new services provided by their local hospitals. While it may be easier to reach younger generations through social media platforms, other consumers regularly watch streaming programming. They will see the ads your accounts run on these programs. And the ads will drive patient flow to the new orthopedics, urology or heart center.

Summary

The local advertising market is alive and well in the U.S. You can help your accounts reach their target market by using the right audience data. Encourage them to run omnichannel campaigns to broaden their reach.

Image by RDNE Stock Project on Pexels

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