BIA Advisory Services has decreased its 2022 U.S. Local Advertising Forecast estimate to $167.4 billion, from its original estimate of $173.3 billion issued in December 2021. Headwinds from overseas conflicts, continuing supply chain issues and deep cuts in ad spending from large verticals like automotive precipitated the reduction. Positives for the ad market still include an anticipated strong political ad year, the expansion of online gambling local advertising and consumer spending on leisure and recreational activities.
Traditional media revenue, which includes radio, is predicted to add up to $88 million in 2022. Specifically, radio over-the-air (OTA) is expected to total approximately $11.2 billion, up from 2021’s figures but down from the original estimate last December. Digital media revenue is estimated at $79 billion overall. Significant growth is expected in the radio digital category, at +14.5 percent. Online radio local ad spend is expected to be just under $2.99 billion, down from the initial report’s expectations but still much higher than the 2021 local ad revenue.
“The year didn’t start as strong as we had anticipated, making for a difficult first two quarters as some expected advertising spend started to retract,” said Mark Fratrik, SVP/Chief Economist, BIA Advisory Services. “On the one hand, personal income continues to rise, but the cost of consumer goods, rising gas prices and inflation are having a major impact and we believe that will influence how advertisers will choose to use their ad dollars in the coming months. All of that must be weighed against what we see as positives for local advertising this year.”
BIAs VP Forecasting & Analysis, Nicole Ovadia, offered her assessment on the forecast saying, “We are seeing the economy play out in local advertising. For instance, people saved money during the pandemic and now, are enjoying different areas in the leisure and recreational verticals. People are spending on vacations and activities, and even going back to the gym. In all these areas, including political, we increased local advertising expectations. For businesses that have a direct reliance on supply chains, we have lowered expectations and will continue to monitor the situation throughout the summer fully expecting we may have to revise our estimates because the economy is in such a state of flux.”
