BIA has released an adjusted local advertising projection for 2020. As expected, the impact on local media will be massive. The research firm has revised an earlier 2020 revenue prediction of $161.3 Billion to $144.3 Billion, a decline of 10.6%. That huge hit from a crisis barely two months old.
The new estimate also represents a 3.6 percent decline from 2019, even with the added political advertising revenue of $7.1B anticipated this year. Of course, there is still no way of really knowing how much longer this crisis will continue.
Radio’s over-the-air revenue, according to BIA, will come in at $11.4 Billion, a decline of nearly $2 Billion. BIA’s pre-COVID-19 projection for radio was $13.1 Billion.
BIA SVP and Chief Economist Mark Fratrik says, “A realistic view of the virus is that it will continue to have a negative impact on the second quarter, with some continuation into the 3 rd quarter. We have assumed that there will be a strong rebound in the latter part of the year, but we will have to re-evaluate as the on-going economic impact becomes clearer.”
This BIA study must be from Fantasyland. (Not to be negative), but the general consensus is that a significant – very significant – percentage of small businesses, and even some major chains, are not going to make it through this and will not be re-opening. So your potential pool of advertisers is substantially reduced. …And even right now, there are radio stations experiencing rate/revenue drops of 50 to 75%. …So in over short term (the next 2 years) the advertising dollar pipeline is not just magically coming back to anywhere near what it was.