Local ad revenue projected to hit $171B in 2025, with CTV and OTT driving growth

The U.S. local advertising market is projected to reach $171 billion in 2025, according to BIA Advisory Services’ latest forecast. The estimate reflects a 6.1% increase in core ad spending from 2024, driven largely by digital media investments.

While core ad spending is on the rise, total ad revenue—including political advertising—is forecasted at $171.4 billion, a slight 0.5% decrease from 2024 due to the previous year’s significant political ad surge.

“Local advertising is showing resilience, despite the ongoing changes in the economic landscape,” said Nicole Ovadia, vice president of forecasting and analysis at BIA. “We’ve adjusted our outlook to account for various market factors like interest rates, consumer sentiment, and significant changes in media consumption patterns that are driving digital growth.”

The forecast highlights a shift in advertising allocation toward digital platforms. Traditional media channels are seeing weaker growth while digital ad formats continue to outperform expectations.

Connected TV (CTV) and over-the-top (OTT) advertising remain the fastest-growing segments in local media. These platforms benefit from increasing adoption by local advertisers looking to engage audiences through streaming services.

Despite 2025 being an off-election year, political ad spending is expected to remain significant in select local markets, particularly where special elections and gubernatorial races take place. However, the absence of a major election cycle means political advertising will not drive overall market growth as it did in 2024.

Several key industries are fueling the local ad market in 2025.

The real estate sector is forecast to grow by 9.3%, while restaurants and retail are expected to rise by 9.2% and 6.8%, respectively. Education and automotive advertising are also experiencing notable increases, both projected to grow by 5.0%.

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“While what we term the ‘3Rs’—restaurants, retail, and real estate—lead growth, we see interesting opportunities in auto and education,” said Rick Ducey, managing director at BIA. “Auto dealers are likely to revive aggressive financing promotions when interest rates ease, and educational institutions are increasing their digital presence, particularly through geo-targeted campaigns.”

The overall trajectory of local advertising remains positive, with digital transformation continuing to reshape the industry. While traditional channels face challenges, digital platforms, CTV and OTT are becoming essential components of local advertising strategies.