After media companies released their second-quarter financial results, a common thread appeared: many saw their advertising revenues either decrease or stay relatively flat. With those results in mind, BIA Advisory Services is now projecting local advertising to slip in 2025.
The company is adjusting its forecast for the year to $169 billion for the year. That figure represents a 2.4% decline compared to the previous year. It also reflects a 1.5% decrease from the previous forecasts that estimated $171.4 billion in local advertising in 2025.
When political advertising is excluded, the forecast rests at $168.2 billion, which would be a 3.2% year-over-year increase. That projection, however, is decreased from the previous $171 billion that was previously set.
“Following a solid performance in 2024, driven by significant political advertising and spending from key sectors such as Legal Services, Healthcare, and Quick Service Restaurants, we are now noticing a shift in the advertising landscape for 2025,” BIA Advisory Services Vice President of Forecasting and Data Analysis Senan Mele said. “Ad growth has slowed down slightly as businesses implement more cautious spending strategies and optimize their channel allocations. This change underscores the necessity for agility in responding to the rapidly evolving economic environment.”
Inside the total local advertising spend, BIA Advisory Services shared that $855 million is projected to be spent by digital media in 2025. Digital is expected to account for 53.7% of total advertising spending, amounting to $90.4 billion.
Connected TV and Over-the-Top TV is expected to see its share of the pie increase to 29.3% of all local advertising during the year. Meanwhile, mobile advertising is expected to grow by 9.4%.
“The impressive growth of CTV and OTT services from 2024 to 2025 is largely attributed to ad-supported platforms now capturing 73.6% of TV viewing,” said BIA’s Managing Director Rick Ducey. “This transition from traditional broadcasting to streaming reinforces the business case for TV broadcasters to implement CTV/OTT strategies, enabling them to reclaim audiences and enhance their targetable ad inventory.
“However, despite increasing viewership and advertising spending, streaming providers face significant challenges in achieving profitability in a fragmented market,” concluded Ducey.
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