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.
Our FM station on the Southern Oregon Coast, “THE LEGEND”, programs to an “over 40” audience of men and women with legendary hits, mostly from the 60’s and 70’s. We utilize legendary music and legendary personalities. We incorporate fresh material of former K-EARTH (Los Angeles) personalities, combined with my live morning show, weekdays, 6-10 am.
Both revenues and ratings are up from our pre-covid numbers and climbing. We limit commercial content to no more than 4 breaks per hour with a strict limit of 3-minutes in commercials in any break. The station is music intensive and we keep a major sponsored contest/promotion going all the time. Although we suffered an immediate drop in revenue when Covid 19 closed local businesses, we have come back with revenues up approximately 18% from pre-covid numbers. Our sales team is making regular calls on existing clients as well as prospects.
Traditional radio may be good for the over 55+ crowd. MAYBE. Campers, Cadillac’s, and investment options. Survey people between 12 to 40 years of age. They do not listen to traditional radio. Its an antique to them. Like a phone book, or a paper map. They have their own playlists, not the same 10 songs over and over, no 6 commercials a break, and no wasted time with worthless on air personality opinions. This may sound harsh, but its a fact.
Business owners are finding out that Google and Facebook work for a whole lot less, with a MUCH better reach, target., and ROI.
Agreed…Harsh but true. Covid has merely accelerated the inevitable. National is dying a slow death with local right behind. White labeled digital solutions and podcasting aren’t competitive with cost effective SEO and SEM with most SMBs. Most radio companies are over 50% off in revenue and this won’t be a V recovery. And forget about recruiting quality young talent; nothing sexy about slinging radio spots. That sound you hear is the death rattle.
I’m glad you’re not on our stations’ teams. You’re obfuscating the current environment, certainly not allowed at our company. 93% of Americans listen to radio every week.
At-home listening is robust, and our streaming app is a tremendous digital opportunity for our advertisers, both national and local. So your comments are not in line with the tremendous
verticals that radio offers, benefitting advertisers, revenue growth and shareholder value.
Radio is the number one reach vehicle of all major media, including diggggital. Frank Passmore just needs to get out more often.
I find it amusing that so many naysayers (not you, obviously) come on here and take the time to bash broadcast radio…on a site that’s mainly about…broadcast radio!
If so, maybe they need to just find other things to do with their confused lives…
Bottom line, radio reps need to get back out there now, in front of the client. Even with Covid, businesses are trying to “normalize” as much as they can. Just wear a mask. Of course, sell up your digital because that is still the flavor of the month, for sure. And we have a big story to tell, regarding the robust surge of online and in-home online listening! Plus, this may seem old school, but show up with a spec tape. That can create positive dialogue that leads to a sale. These are opportunities and immediate ways to ramp up your billing. …Don’t get caught up in the negativity and the Covid excuses.
Yep. I totally agree with everything you’ve said here.
Hopefully, as ‘glass half-full’ salespeople, who truly believe in what radio can offer to our clients and listeners, we already have that spirit of what you’ve said. If not, I would suggest that these ‘AEs’ get out of the business — now! — and find a new line of work. This industry needs productive folks who relish the opportunity to take on and defeat the challenges that come from the COVID environment that we’re in…because there will always be ‘challenges’ out there.