The future of radio advertising may be in question, but the latest update to Borrell Associates’ Local Ad Forecast reveals that the downturn may not be as steep, or as simple, as it seems – because your individual market results may vary.
While over-the-air revenue is expected to decline by approximately 12% between 2024 and 2029, the report suggests a “slow coast downhill” rather than a freefall for local AM/FM, with nuanced differences emerging across individual markets. In some regions, like Charleston, SC, local radio spending is actually projected to rise just over 1% through 2029.
However, other market projections aren’t so rosy. Cincinnati and Riverside tell a different story, with declines of 10.6% and nearly 15%, respectively, indicating more significant challenges depending on how stations are selling and bundling their offerings. Factors like commuting patterns, population demographics, and the health of local economies are also critical to understanding why some radio markets are outperforming others.
Local radio’s relative resilience in certain markets is linked to evolving sales strategies. Borrell found that some sales teams are leading with digital products and then adding radio into packages, helping to stabilize revenue. This bundling tactic has helped mitigate audience erosion caused by streaming and on-demand alternatives, and, in some cases, has allowed radio reps to maintain their value proposition to advertisers, even as media consumption habits shift and digital-first platforms continue to pull ad dollars.
Still, the long-term trend remains one of contraction. National spot and network radio are expected to decline faster than local, with drops ranging from 15% to 30%.
Innovation in creative advertising formats like local contests, sponsorships, and live reads is still drawing interest, but these alone won’t be enough to counterbalance the structural headwinds affecting the industry. Instead, it’s integrated campaigns and hybrid approaches that appear to offer the most promising paths forward.
Large advertisers are moving away from linear broadcast formats in favor of more scalable and targeted digital audio options like streaming and podcasts. Borrell previously predicted digital to account for 25% of radio revenue by the end of this year.
From $1.2 billion in 2024, spending is forecasted to exceed $2 billion by 2029, with year-over-year gains accelerating to double digits starting in 2027. This includes streaming audio, podcasting, and other locally targeted formats that benefit from AI-driven personalization and enhanced targeting for small businesses.
Borrell’s analysts also pointed to the changing regulatory environment as a factor boosting digital audio. New privacy laws and anti-spam measures are beginning to curb less effective forms of advertising like static display and email marketing, making digital audio a more attractive, high-engagement alternative.
In the report’s summation: “Radio isn’t falling off a cliff like some other traditional media,” but, “it’s definitely not climbing either.”
The full results of Borrell’s local marketer survey and new local ad forecast will be revealed in a webinar at 11a ET later today. Registration remains open.
Here’s the deal when analyzing this data: “National spot and network radio are expected to decline faster than local, with drops ranging from 15% to 30%.”
Even a 10% decline is not recoverable, and that’s below the floor. You can bank on a guaranteed 20% decline. A 30% decline would surely force several stations, even clusters to basically flip to auto-pilot.
This will also drive local rates through the roof. Meaning, mom and pop will not be able to afford radio; it’s already WAY overpriced.
Now what? Forget the national business. The big dogs have embraced social-digital and have now hired the teams to allocate and measure in those spaces. They aren’t going back. Stop paying a “national spot manager” to send emails and go “visit the client” twice a year. There’s ZERO ROI in that position and they are just doing what the client says with 35% of the budget that was available 5 years ago. It’s over.
Start focusing on main street. Lower prices and cater everything to being “hometown”…. news, sports, talk… all of it. Music can’t be “hometown”, what happens between the music can be. There’s less money in this, overall, but a a much longer future than being a clearinghouse to national advertisers who A) have no loyalty B) have less and less money.
Also, stop saying “local”… there’s no pride in local, and it’s usually an excuse to be lazy and just announce the times and weather of the state fair. BORING.
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