As every first quarter earnings call from across the radio industry showed, traditional broadcasters can no longer ignore digital. Now a new forecast echoes those sentiments, but with good news for the overall audio ecosystem even as over-the-air radio slows.
The March 2024 forecast from Axel Springer SE’s eMarketer indicates digital audio advertising is set to experience significant growth from 2022 to 2028, while traditional broadcast radio ad revenues are expected to decline.
In 2022, broadcast radio advertising commanded $11.04 billion of the total $17.36 billion spent on audio ads. However, this number is projected to decrease annually, falling to $9.68 billion by 2028.
In contrast, digital audio advertising, which encompasses streaming services like Pandora and Spotify, podcasts, and satellite radio, is predicted to grow from $6.32 billion in 2022 to $8.74 billion in 2028.
As detailed last week by IAB, podcast ad revenue saw a modest increase of 5% in 2023, reaching $1.9 billion, a slowdown from the rapid growth of previous years. Despite the challenging advertising climate impacting mid-tier companies, top podcast producers continued to see strong growth. The IAB anticipates a rebound in growth, projecting a 12% increase in 2024, with revenues expected to approach $2.6 billion by 2026.
Despite the decline in broadcast radio ad revenues, eMarketer calls for overall audio ad spending to increase, climbing from $17.36 billion in 2022 to $18.42 billion in 2028. So while traditional radio’s share of the pie might be decreasing, audio as a whole continues to thrive.
Radio is actively participating in the change, as a joint study by Marketron, RAB, and Borrell Associates indicates that digital revenue for radio rose by 6.8% in 2023 to reach $1.9 billion.
This growth is part of a steady trend, with the industry’s Compound Annual Growth Rate standing at 6.4% since 2020. In 2022, digital sales contributed 21% to the total ad revenue, showing significant growth from the previous year and varying earnings from $82,835 in smaller markets to $1.2 million in larger ones.
