The forecasted midterm windfall for AM/FM? It never arrived, according to iHeartMedia leaders, because local TV took the campaign dollars. After trimming Q3 loss, iHeart is eyeing strategic AI deployment, programmatic technology, and podcasts for a lift in 2027.
Third quarter revenue reached $1.03 billion, up 3.3% and short of the company’s guidance for mid-single-digit growth. Multiplatform Group revenue was $562 million, down 4.9%, or 6.6% excluding political.
Political advertising fell short of what iHeart expected, accounting for about a third of the Q3 revenue underperformance. Multiplatform Group revenue came in slightly below 2022 levels, even though the company had expected to beat 2024. iHeart cited several factors. Local TV broadcasters created more inventory and kept dollars that typically spill over to radio. More political spending moved to programmatic platforms.
iHeartMedia Chairman and CEO Bob Pittman was quick to point out a weakness here: “If you do the quick analysis of it, TV advertising turns out not to be a strong indicator for whether a candidate won. And in fact, as TV spend, as a percentage of media spend rose, the percentage chance of winning the campaign actually fell.” No equivalencies were provided for AM/FM.
So how will station groups make up the difference? The broadcaster is all-in on programmatic.
iHeart expects about $200 million in programmatic revenue this year, up approximately 50% from $135 million in 2025. Next year, total programmatic revenue is projected to double to about $400 million, with roughly $100 million of that coming from broadcast radio.
In June, iHeart introduced AudioGraph to bring digital-style targeting and measurement to broadcast radio. The company said it comes fully to market in the fourth quarter. Revenue from it is so far immaterial, though iHeart said early campaigns performed better than the old way of buying radio. Triton Digital also completed its first AI-agent-to-AI-agent media buy, which iHeart cited as a sign of where audio buying is headed.
iHeart said the share of agencies buying audio programmatically grew from 41% in 2022 to 82% this year, and that core radio buying is moving to programmatic ahead of its ability to participate fully.
Pittman remarked, “Simply put, with Audiograph, we are meeting the advertising community the way they want to buy advertising. Given the limited reach of the ad-supported digital audio players, we believe broadcast radio is the only solution for buyers to get the audience reach they need for audio campaigns.”
The non-cash co-marketing partnerships that support AudioGraph weighed on results. They are expected to produce a net negative impact of about $100 million in the fourth quarter, with roughly $40 million rolling into 2027. Chief Financial Officer Mike McGinnis said the drag should be resolved by the first or second quarter.
In Q3, podcasting revenue was $174 million, up 24.6%, and accounted for 17% of Q3 revenue. The Digital Audio Group generated $389 million, up 13.8%, and digital excluding podcasting grew 6.3% to $215 million. iHeart expects fourth-quarter podcast revenue to rise approximately 20%.
As its podcasting segment continues to grow, iHeart will report podcasting separately from the Digital Audio Group, creating four reporting segments in 2027. Pittman noted, “This additional granularity is expected to make it easier for the investor community to fully value all four of our segments and our entire company. Three of our expected four future segments are strong growth businesses, and we think audiograph and our attribution tools will be an important component to getting our multi-platform group back to growth.”
For the fourth quarter, the company did not announce new job cuts. It said it is working on incremental cost efficiencies for 2027, including some AI and other technology.
