A report released today by BIA/Kelsey predicts U.S. Local advertising revenue to grow to $151.2 billion, the largest annual increase in five years. Their U.S. Local Advertising Forecast 2018 has good news for radio, for which Kelsey expects 2018 revenues to be $15.7 billion, $1.5 billion from online, and the lion’s share of $14.2 billion from over the air. That’s up $0.2 billion from 2017. Going out five years, the forecast anticipates radio revenues to be $16.7 billion in 2022.
BIA/Kelsey Chief Economist and SVP Mark Fratrick says he expects slow but steady growth for radio over the next five years. “2017 was a year of basically no growth in radio over-the-air advertising, with future years also only showing small increases of less than 1% annually. Increased streaming audio competitors and increased competitors for advertisers has basically kept the over-the-air advertising stagnant, with online efforts by stations continuing to help support a slight overall revenue growth.”
According to BIA/Kelsey, the heightened expectations for next year are being driven both by a stronger economy and the expectation of highly-competitive statewide political races next year. Fratrick adds, “Combine these factors with the continued strength of traditional and online media and the revenue landscape for next year looks robust.”
According to the report, BIA/Kelsey ranks radio as fourth highest in media revenue and share, with direct mail leading the pack at 25.4%, local TV Number 2 with 13.8% and mobile taking third place with 12.6%.
The forecast also projects significant ad spending in native social advertising next year due to its ability to target and reach local consumers. Social media ad revenues from mobile (not including tablets) now represent about 71% of total social ad spending and will grow to nearly 80% by 2022 as more of the user activity shifts away from desktops.