Borrell lifts U.S. local ad forecast as business churn boosts digital

Borrell Associates says a major overhaul of its local advertising model shows U.S. digital local ad growth is running nearly twice as fast as previously forecast, driven by a reshuffling of business establishments and rising streaming video demand. The new outlook puts digital at 75% of local ad spending by 2027 and 80% by 2030, with a fuller briefing set for Nov. 11.

Why it matters: - Borrell’s revised forecast suggests local media is losing more traditional ad dollars faster than expected. - The shift raises pressure on newspapers, radio and broadcast outlets that still depend heavily on retail advertisers. - The company now sees digital taking a much larger share of the local ad market by the end of the decade.

What happened: - Borrell Associates released new U.S. local advertising forecasts on Nov. 2, saying digital local ad growth is nearly twice as fast as its earlier estimates. - The company says digital will account for 75% of local advertising by the end of 2027 and 80% by 2030. - Borrell plans to share full findings in a webinar on Nov. 11. - The forecast puts U.S. local advertising spending at $155.6 billion in 2027, up 3.9% from $149.7 billion in 2026.

The details: - Digital media is forecast to grow 6.7% in 2027. - Traditional print, broadcast and outdoor media are forecast to fall 3.5% in 2027. - Online video is the fastest-growing ad category, with Borrell forecasting 13.5% growth in 2026 and 10% growth in 2027. - Streaming video is now expected to be the largest of 18 media types, replacing Search Engine Marketing, which has held that position since 2013. - Borrell says U.S. business establishments increased by about 1.6 million between 2020 and 2025, a 15% jump from 10.5 million to 12.1 million. - The Bureau of Labor Statistics estimates 5.6 million establishments closed over that period, while 7.3 million new establishments opened. - The new mix favored service businesses over retailers. - Information-sector establishments rose 49%. - Professional and business services grew 29%. - Health and education establishments increased 20%. - Combined retail, wholesale and transportation establishments grew 4%. - Average private business size fell to 11.3 employees in 2025 from 12.7 in 2019, an 11% decline. - Borrell’s research draws on more than 1,700 documents from 833 organizations and covers 101 business categories across 3,143 U.S. counties. - The company says it used more than 600 sources in the latest overhaul of local market advertising. - Borrell also launched a new AI access point to advertising data at the company’s AI portal through a Model Context Protocol server. - The system lets users query market data with natural-language questions through compatible AI platforms.

Between the lines: - The revised model suggests the local ad economy is being reshaped by business churn, not just by a gradual shift from legacy media to digital. - The loss of retail-heavy advertisers helps explain why traditional local media is under more pressure even as overall local spending still rises. - A bigger share of smaller, service-oriented businesses likely changes which media formats can reach advertisers efficiently. - The AI access point also signals Borrell is packaging its data for easier use inside third-party AI tools, not just through reports.

What's next: - Borrell will present the full forecast on Nov. 11. - The company’s revised projections run through 2030 and will likely serve as a benchmark for local media planning. - Advertisers and media companies will watch whether the faster digital growth and weaker traditional spending track through 2027 and beyond.

The bottom line: - Borrell’s new model says local advertising is shifting harder and faster toward digital than previously expected, and the change is being driven by a transformed U.S. business base.