Market intelligence firm BIA Advisory Services has revised its U.S. Local Advertising Forecast for this year, projecting local ad spending will decline 2.4 percent from 2024.
In an update released on Wednesday, BIA says it expects local media platforms to earn $169 billion from ads this year, down from an earlier forecast of $171.4 billion.
The figure includes core and political advertising. When political advertising is excluded, BIA says local media platforms could earn as much as $168.2 billion in 2025, an increase of nearly 4 percent compared to last year’s core advertising spend.
Economic turbulence caused by tighter credit restrictions and the impact of tariffs on prices are creating more pressure on local ad budgets across all sectors, BIA noted. The revised forecast incorporates an anticipated minimum tariff environment of 10 percent and the adjustments businesses may need to make in response.
“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,” said BIA Vice President of Forecasting and Data Analysis Senan Mele. “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.”
Real estate, restaurants, finance and insurance are among the fastest-growing local ad categories this year. Real estate is projected to grow over 10 percent, while restaurant and food is expected to increase its spending by nearly 8 percent. Finance and insurance are upping their spend by around 4 percent, BIA said.
Business units that are logging year-over declines include media, healthcare and general services, BIA noted.
Mele said there are still bright spots for advertisers, noting that the holiday shopping season is expected to begin in early November.
“This extended timeframe allows for a more strategic approach to targeted advertising,” Mele said. “We’re excited to explore these trends further and provide our clients with insights that can help them capitalize on the growth in fast-growing categories while also navigating the declines.”
