Just days after her appearance at Forecast 2023 in November 2022, BIA Advisory Services VP of Forecasting and Analysis Nicole Ovadia offered up her first prediction of just where media advertising revenues will be in 2023. At the time, a decline of 0.5% from the firm’s final estimate of $166.5 billion for 2022 was expected.
Revised data has just been released by BIA, and the year is turning out a little less fiscally robust and what was envisioned.
As such, erase that predicted $800 million decline in revenue across all media in the U.S. to $165.7 billion.
The new total U.S. ad revenue total for 2023, according to BIA, is $161.7 billion.
That represents $4 million fewer local ad dollars, based on the new estimates.
Breaking down the new numbers by category, minus political:
- Over-the-air Television will bring in $16.0 billion
- TV Digital dollars will total $1.8 billion
- Broadcast Radio will total $10.4 billion
- Radio’s Digital revenue will reach $2.8 billion
That’s a big change from seven months ago.
At that time, OTA TV was forecast for revenue of $18.5 billion in 2023, while Broadcast Radio revenue was pegged at $13.5 billion.
What’s led BIA to revise its forecast downward, and in a big way for Radio? “A mixed start in the economy this year and the tempered growth in digital advertising,” is a key reason, BIA says of its new forecast, which measures 16 media and 96 sub-verticals.
Without Political, Radio OTA is down 3.9% in 2023. It was up 1.2% in 2022 and is forecast to be down 1.4% in 2024 and 1.0% in 2025. A BIA spokesperson notes that Radio will take a larger hit in 2023 than in other years.
“After Meta, Alphabet and others lowered expectations for 2023, we examined local
digital advertising spending revenues over the first six months of the year and determined a reduction was necessary,” Ovadia commented, “After years of double-digit growth, we are seeing some headwinds that will have a significant impact on digital local advertising. For traditional media, while we’ve made changes to certain media and categories throughout our forecast, the total ad forecast for this segment remains consistent with our original expectations.”
Still, digital remains the growth driver, and in 2023 digital revenue will grow to $81 billion; the original total offered by BIA was $78 billion.
BIA defines TV digital to include all digital advertising sold by local broadcast stations, excluding Connected TV/Over-the-Top (CTV/OTT). This includes mobile apps, search, social, Owned & Operated inventory, banner ads, and the like.
Taking political out of the expected ad spend this year, key indicators for media channels in
2023 include the following:
- The top three paid media channels for 2023 include Direct Mail ($37 billion), Mobile ($32 billion),
and PC/Laptop ($28 billion). - Connected TV/OTT is still slated to be the fastest-growing (18.5% this year), with an
estimated $2.4 billion in revenue. - Broadcast TV OTA (+0.2%), TV Digital (+4.9%) and Radio Digital (+4.1%) will see small increases even in this non-political year.
Managing Director Rick Ducey said, “Both linear TV and digital budgets are fueling the growth of Connected TV/OTT, as well as new dollars from publishers and aggregators that are using the channel to extend their programmatic platform to long tail businesses.”
AN UPTICK FOR AUTO
When examining the top spending sub-verticals, BIA advises that later in the year, growth
is expected in Auto, and the company is raising expectations for Tier 3 – New Car Dealers, and Automotive Repair Services.
Other important verticals for local advertising where BIA is raising expectations include Savings/Credit Institutions and Other Loan Services, Plumbers and HVAC, and Realtors.
Although political will be a huge advertising category in 2024, BIA does anticipate
some spending to begin later in 2023.
The updated local advertising forecast for 2023 lowers estimates for Online Gambling,
Office Supplies and Stationery Stores, Auto & Direct Property Insurance, Health and Personal Care Stores.
With Political
TV OTA: $16.2B, -18.4%
TV Digital: $1.8B, -9.2%
Radio OTA: $10.5B, -7.5%
Radio Digital: $2.8B, +2.0%
Without Political
TV OTA: $16.0B, +0.2%
TV Digital: $1.8B, +4.9%
Radio OTA: $10.4B, -3.9%
Radio Digital: $2.8B, +4.1%
