Local Ad Market to Jump by 5.8% in 2020

BY Kathy Crosett
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The local advertising market is set to grow by 5.8% over this year’s levels in 2020. In their latest report, BIA Advisory analysts explain that traditional advertising will increase just over 1% and amount to $94.4 billion next year. On the digital front, the 12.8% growth rate will bring the spending level to $66.9 billion. Together, these advertising formats will reach $161 billion next year, marking a new level in the local market.

The Political Bonus

Not every election will be as contentious or expensive for office seekers as 2020 is shaping up to be. But while the election cycle runs its course, media companies will benefit. Of the $18.8 billion in new ad money expected to come into the local market next year, roughly $6.58 billion will be related to candidates and issues campaigns. Mark Fratrik, chief economist and senior vice president at BIA, reports that "political ad spending will be a serious driver of local ad revenue next year.” Similarly aggressive forecasts for political ad spending have been issued by Kantar Media and others.

BIA analysts believe local ad spending by media format will break out roughly along these lines:

  • Over-​the-​air TV 47%
  • Online/​digital 22%
  • Cable 13.9%
  • Radio 4.7%
  • OTT 0.8%

Over-​the-​Top TV

Whether consumers and marketers call it connected TV or OTT, it’s growing. The total ad spending figure for local OTT 2020 is likely to be $1.06 billion, with a projected increase to $2.13 billion in 2024. The overall U.S. OTT market is expected to be close to $5 billion. These spending projections map closely to the continued shift to OTT TV viewing by consumers. While up to 70% of consumers believe they are too many options when it comes to streaming TV, those viewers who have made the shift subscribe to an average of three services. They clearly enjoy this entertainment and marketers must get in front of where they consumers spend their media time.

If you’re selling OTT media, check out the AudienceSCAN profiles for audiences that watch this programming and respond to advertising on these services. This information, available at AdMall from SalesFuel will help you prepare your pitch to local businesses.

Social Media

In the local ad market, BIA analysts predict that 18% of the spending, or about $29.5 billion, will go to social media. Not all of this spending will be done by local businesses. Larger national and regional advertisers are increasingly using social media to target consumers in local markets.

Keep these insights in mind as you work with your clients on their 2020 ad budgets.