We’ve been reporting on it for the last two weeks. A government mandated shut-down of so called non-essential businesses due to the pandemic put the brakes on advertising and totally eliminated all events. The days of radio being a $17 billion industry seem so far away.
Public radio companies have been reporting revenue declines around 50% in the second quarter of 2020. And, while many have been touting the growth of digital and podcasting revenue, the total amounts of those two divisions is small compared to the revenue generated from over-the-air commercials.
BIA’s latest projection for 2020 local over-the-air radio revenue is down $200 million from its last projection in April and a whopping $2 billion from its first projection in November of 2019.
Due to the continued economic uncertainty brought on by COVID-19, BIA Advisory Services has adjusted its total estimate for 2020 local advertising revenue down another $4 billion. Back in November of 2019 BIA estimated local ad revenue at $161.3 Billion. In April that was revised to $144.3 billion. Now that number is down to $140.4 billion.
BIA’s Chief Economist Mark Fratrick says the post-COVID update takes into account a weaker economy, job losses and a downturn in key business verticals. “Right now, we believe a realistic view of the economy overall and the advertising marketplace is that after a dramatic decrease in the second-quarter and a bumpy start to the third, the remainder of the year will turn positive but end up with an overall decline in local advertising for the year.”
Political ad spending should prevent 2020 from being a total disaster. Since its April forecast, BIA increased the expected political ad spend from $7.1 billion to $7.3 billion. Of the $209 million increase, the distributed share to different media include $138 million to TV OTA, $40 million to Cable, $26 million to Online/Digital, and $5 million to Radio OTA.