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News | Study: Local TV Advertising to Grow 5.9% in 2024

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Study: Local TV Advertising to Grow 5.9% in 2024

309 Views / News Story by Advert On Click / 11 June 2024
Source: tvtechnology
Study: Local TV Advertising to Grow 5.9% in 2024

But Borrell Associates expects it to fall in 2025 to below what it was in 2020

WILLIAMSBURG, Va. —A new forecast for local advertising from Borrell Associates provides some short-term good news and some longer-term bad news for local TV broadcasters. It’s newly released study predicts local TV advertising will jump by 5.9% in 2024 to $9.91 billion but decline sharply in the off-election year of 2025 to $8.77 billion, lower than the $9.16 billion stations earned in 2020. 

Even the 2024 election year spike is consistent with a longer term decline in local TV advertising as the $9.91 billion 2024 forecast is lower than the $10.62 in ad revenue stations earned in the 2022 election year. Traditionally presidential election years like 2024 are higher than years like 2022 with Congressional elections. During the next presidential election in 2028, broadcast TV is expected to see $9.1 billion in ad revenue. 

Overall, the new Borrell report predicts that local advertising “isn’t quite shaping up as the bountiful year that many had hoped for, but it’s still on pace to grow a healthy 3.2%.” 

Borrell is also forecasting slower than expected growth for streaming video advertising (OTT/CTV) among local buyers is growing far slower than initially predicted. The forecast calls for 3.9% growth this year, topping $23.3 billion.

Looking longer range, Borrell foresees local advertising growing at a 2.2% Compound Annual Growth Rate over the next five years.

The new projections also mark a downward revision from the ad-tracking company’s initial forecast for 2024, issued last November, which was 1.2 points higher. The downward adjustment was triggered by new information from Borrell’s principal sources, including the U.S. Bureau of Labor Statistics, Woods & Pool, D&B, IBIS World, and Borrell’s quarterly SMB Business Barometer, the researchers said. 

“For the past three quarters, we haven’t seen a lot of variation in SMBs’ attitudes about the economy and their plans to invest in advertising,” said Corey Elliott, executive vice president of Local Market Intelligence and Borrell’s chief forecaster. “They’re mostly neutral and slightly positive about the economy, but we’re still not seeing anything that would signal the bigger spring-back that many are hoping for.”

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Since Q3 of last year and continuing through Q2 of this year, Borrell’s barometer survey has shown that a consistent 50% of SMBs consider it to be harder to sustain a small business than it was six months prior.

Overall, the forecast predicts a good year:

The scale-back in growth for streaming video held the biggest surprise for Elliott.

“While there’s a lot of passion around digital video, it presents a bit of a challenge for local businesses,” he said. “They’ve been telling us in surveys that they don’t know how to purchase it or how it fits into their marketing plan. They aren’t even aware that it’s cheaper than broadcast TV. That all points to a more subdued ramp-up for OTT spending.

“That being said,” Elliott added, “the OTT jackrabbit is still outpacing everything else. It’s the fastest growing form of advertising and is already the fourth largest among the 18 different formats we track.”

Borrell’s latest release includes new forecasts for all U.S. markets, where shifts in the composition of local businesses have translated to significant differences from U.S. average growth rates. For instance, spending on newspaper advertising in Albany, NY, is forecast to grow 3.7% this year, while it’s forecast to decline 13.6% in Williamsburg, VA. In Little Rock, AR, radio spending is forecast to grow 7.3%, but decline by 7.0% in Baltimore, MD.

In addition to the 2024 forecasts, Borrell extended its’ long-range outlook to 2028. By then, Borrell’s forecast engine puts total local advertising at $161.2 billion, or 11.8% more than it was in 2023. Five years from now, the three advertising formats will all be basically tied for first place: General Paid Search ($32 billion), Targeted Online Display ads ($30.3 billion), and Streaming Video/OTT/CTV ($30.0 billion). Broadcast TV clocks in as the fourth-largest at $9.1 billion.

Tags Advertising TV