BIA Advisory Services Projects Decline For Local Radio Ad Revenues In 2023

2023 Local Ad Projections

Local radio revenues – broadcast and digital -- are projected to decline from $14 billion in 2022 to $13.5 billion in 2023 in the new BIA ADVISORY SERVICES 2023 U.S. Local Advertising Forecast, released TODAY (11/30). The slippage is due to the loss of midterm political revenue next year; the number is flat at $13.5 billion when political revenue is removed from 2022’s number. 

Overall media local ad revenues are projected to fall 0.5% to $165.7 billion, but, again, would actually rise when political advertising revenues are removed from the estimates, showing a 4.8% overall increase to a projected $165.2 billion. BIA says that the relative flatness of the ad market reflects continued economic and supply chain concerns, but adds that the forecast becomes “more bullish starting mid-2023.” Local digital ad revenue is projected to grow to $81 billion, 49% of total ad spend, in 2023.

The projected top three paid media channels for 2023 are direct mail at $37.2 billion (but with its growth slowing), mobile at $33.5 billion, and PC/Laptop at $29 billion.  Projected to increase in the next year are TV Digital (up 17.3%), Over-the-Top video (up 12.3%), and Mobile (up 17.3%). Business verticals showing projected growth include education (9%), retail (8.7%), and restaurants (7.5%), while political, falling from the midterm level, is expected to dip 78%, and leisure and recreation (-4.9%) and  real estate (-1%) are expected to shrink as well. As for automotive, the vertical is looking at 4.9% growth, backloaded into the latter part of 2023.

“This year has been filled with contrasting economic indicators creating several challenges for the local advertising marketplace,” said VP Forecasting & Analysis NICOLE OVADIA. “Supply chain issues continued to plague the first couple of quarters of 2022 making it difficult for local media sellers. In the SUMMER, we had higher hopes for the remainder of the year; however, inflation issues and recession fears started to set in and that stalled anticipated rebounds in key verticals such as automotive.

“For our 2023 forecast we lowered near-term expectations to reflect the current economic climate that we anticipate will stay with us into next year.”

“When it comes to advertising in the business vertical market, education offers a tremendous opportunity for local media in 2023, with companies offering opportunities for employees to improve their training and with people who are experiencing a job transition often enrolling in classes to advance their education,” added OVADIA. “For other verticals, too, I believe they will pop potentially faster if we see the Fed slow or stop raising interest rates, inflation tamed and a smaller than anticipated recession. Even with the economy in flux, the continuing strength of the labor market and corporate profits makes me feel confident that key verticals will show growth in the year ahead.”

BIA paid clients can find the full report on the ADVantage and MEDIA Access Pro platforms. A webinar discussing “Top Recession-Proof Verticals for 2023” is scheduled for TODAY at 2p (ET) – register here -- and a podcast with OVADIA and CEO TOM BUONO discussing the findings will be issued as well – listen here.

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