As Q4 holds initially unexpected signs of life for advertising revenue as fears of recession trend downward, Madison and Wall analyst Brian Wieser has updated his ad forecast for 2024. While marketing’s pulse grows stronger, audio may sit in a glass-half-full/half-empty scenario – it’s up to the optimism level of the beholder.
US advertising, excluding political ads, exhibited a notable upswing in the third quarter of 2023, growing by 8.1%. Audio didn’t fare nearly as well, at a 2.6% year-over-year decline in ad growth. If there is a particular weak spot, the report doesn’t say – “audio” encompasses both traditional and digital formats, as opposed to breakdowns into AM/FM or podcasts.
Per Wieser, audio’s diminishing Q3 return felt, “similar to the decline for publishing of newspapers, magazines, and related digital inventory.” This contrasts with the 3% increase in out-of-home advertising, buoyed by returning commutes, cinema, and digital out-of-home activities.
Even with the loss, audio still outperformed the rapidly sinking traditional television sector, whose audience share continues to evaporate. National TV saw a sharper decline of -5.6%, even when including its connected TV/digital inventory. Local TV fell more gently, but still fell short of audio at a -2.8% year-over-year decrease.
Mentioning digital, digital advertising in the third quarter of 2023 saw remarkable growth, which was a sentiment shared and felt by most radio companies that have expanded their marketing strategies into the area. Excluding political ads, digital platforms grew by 14.6%, reaching the highest level since the first quarter of 2022.
With the overall Q3 improvements taken under advisement, Madison and Wall have revised their growth forecast for Q4 2023 upwards from 8.0% to 9.0%, excluding political ads, indicating a 5.9% overall growth for the U.S. advertising market in 2023.
Looking ahead to 2024, Wieser raised his growth forecast to 5.2%, up from 4.3%, “While audio in all of its forms will probably be flattish.” This is where the glass-half-full/half-empty argument comes in – is it a victory for audio’s revenue to not fall, or is any lack of improvement a loss?
