BIA Advisory Services estimates the local broadcast TV industry in 2022 will generate $21 billion in advertising revenue, with $19.3 billion in over-the-air (OTA) revenue and $1.7 billion in digital. This estimate indicates an increase of 26.5 percent over 2021 for the industry. Previewing the new forecast today in an address before the TVB Forward Conference, Tom Buono, founder and chief executive officer of BIA Advisory Services, explained drivers behind the forecast that include a long and significant political advertising season, growth in TV’s digital advertising opportunities, and positive economic signs for key verticals.

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“We take into consideration economic trends, consumer behavior, growth in digital ad spending and the local advertising environment. These points have all shifted in an unorthodox way since the pandemic first hit and are now affecting television viewing habits and local advertising spending.”

“There are many factors that go into our forecasting,” said Buono. “We take into consideration economic trends, consumer behavior, growth in digital ad spending and the local advertising environment. These points have all shifted in an unorthodox way since the pandemic first hit and are now affecting television viewing habits and local advertising spending.”

Buono said that BIA’s analysts saw a V-shaped recovery in local advertising from 2019 to 2021 – from a high of $148b and then about a $10 billion dip in 2020 to a close return in 2021 to pre-pandemic levels. Over the long-term the expectation is for local advertising in the U.S. to continue in a positive direction barring any new disruptions. BIA is now estimating a 3.4 percent compound annual growth range over this projected period.

The most significant factor going into 2022 for local broadcast TV, Buono explains, is that political advertising spending will be extremely strong for a significant portion of the year. BIA expects next year to rival 2020 and even experience further expansion by 2024. The combined forecasted local TV spend for political is $3.4 billion (OTA + Digital + OTT). An estimated 44.8 percent share of local media political advertising will go to OTA broadcast TV alone. The top five markets for next year’s political advertising will be New York City, Los Angeles, Atlanta, Phoenix, and Philadelphia.

Growth in OTT is also significant. With many Americans’ continuing to work from home and shift their viewing habits, over-the-top (OTT) has become more of a focus for many broadcasters. According to BIA’s estimate, OTT ad spending is expected to reach $1.17 billion in 2021, $1.64 billion in 2022, and will surpass $2 billion by 2024.

“While the total local advertising trend in the U.S. is positive, it’s imperative to note that most of the growth is happening on the digital side, which includes mobile, online, and OTT ad channels. We expect local digital to exceed local traditional in 2023 (due in large part to continuing declines in print media advertising), making cross-platform selling even more important in the future,” said Buono.

Twenty-twenty took its toll on many of the key verticals. Leisure and recreation, auto and retail were hit especially hard. As Buono explains, many verticals have improved in 2021 from a lower base in 2020 and continue to show improvement for next year. For TV OTA, key verticals increasing their spending ad dollars in 2022 will be education, legal services, health, leisure and recreation, and political. Buono advises that possible target categories for the broadcast TV industry include supermarkets, wireless carriers, quick service restaurants (QSRs) and hospitals.

In early September, BIA released its 2022 U.S. Local Advertising Forecast for 16 media, including local broadcast television, and 96 business sub-verticals. The five-year forecast is available for all 210 local television markets and is based on a proprietary forecasting methodology of the local advertising marketplace. Forecast data is delivered by the local advertising intelligence dashboard, BIA ADVantage.

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