The newly-released “S&P Global Market Intelligence Radio & TV Annual Outlook” from Kagan finds some good news in this year’s ad-revenue outlook and some not-so-good news for the next five years, as core advertising categories continue to slump.
The study forecasts that U.S. TV and radio stations will reach $36.19 billion in total advertising revenue in 2024, up 9.3% from $33.10 billion in 2023, primarily due to the influx of record political ad spending in a presidential election year. However, the report predicts negative growth for radio advertising over the next five years as traditional media continues to lose advertising share.
The radio station industry’s five-year ad outlook, driven more by the local market and less by political ad uptick, is expected to decline 3.7% in 2024 to $11.24 billion, excluding network and off-air revenue. The report finds that the local ad market continues to be stronger than the national side of the spot ad business thanks to broadcast stations’ close ties with the local community.
According to the report, national radio spot ad revenue is forecast to decline 6% to $1.81 billion in 2024 and decline 5.8% to $1.71 billion in 2025. The decline is between 5.3% to 4.3% over the remaining years in the forecast period, to $1.41 billion by 2029.
“Radio ads are predominantly local and focus on the auto, retail, travel and entertainment categories, which have been impacted by higher interest rates and price inflation, primarily from higher labor and operating cost,” reads the report.
On the flip side, radio station owners are investing in streaming, podcast and digital marketing service initiatives, with digital revenue expected to rise 6.4% in 2024 to $1.62 billion, 6.3% in 2025 to $1.72 billion and range between 6.1% to 5.7% growth through the rest of the projection period to $2.16 billion in 2029.
“Radio’s lower ad cost, local audience and relatively high return on investment compared to other media are its strengths, while digital investments point to future growth opportunities, with the national and local spot ad market for radio expected to decline over the forecast period,” per the report.
Core ad categories, including automotive, retail and travel, have continued to see softness due to high interest rates and inflationary pressures dampening consumer spending on big-ticket items. Pharmaceuticals, telecom and professional services continue to outperform other ad categories.
More key radio highlights from the report include:
- As radio advertising continues to shift to streaming audio and podcasting alternatives, S&P expects a 5% CAGR decline in national spot and a 3.6% CAGR in local spot, as digital ad growth of 5.9% CAGR offsets larger declines with total radio ad revenue contracting to $10.08 billion by the end of the projection period in 2029.
- Based on radio market-level ad projections, the top five U.S. markets by 2024–2029 CAGR are Boise, Idaho; Seattle-Tacoma, Wash.; Myrtle Beach, S.C.; Denver-Boulder, Colo.; and Tampa-St. Petersburg-Clearwater, Fla.
