With local and national ad spend estimates as high as $10.5 billion, and political's share a potential $400 million – all while 71% of advertisers say they will up or maintain their radio ad budgets – the outlook for the year ahead is bright, according to Marketron's just-released 2024 Radio Revenue Outlook.
“It will be an interesting year with plenty of opportunity,” says Marketron's report, which cites data from multiple industry sources. “2024 has some unique opportunities for the broadcast radio industry to increase its spot ad revenue, [and] to displace other traditional media channels. [Radio] continues to be the leader in ad-supported audio and the preferential choice for in-car listening. Digital may get the headlines, but it’s hard to beat radio’s reach and ability to engage and drive buyer intent.”
Noting studies showing higher engagement levels for audio vs. video ads, the importance of radio's locality, and AM/FM listeners' high purchase intent, the report addresses the need for the medium to correct long-held assumptions. “Radio has much to provide its advertisers, yet many misconceptions exist about its value as an advertising vehicle,” it says, pointing out brand beliefs that “no one’s listening” to AM/FM, that its reach is low compared to other ad-supported media including audio streaming, or that radio ads have no ROI or sales lift. “It’s easy for this fallacy to permeate a world where some think digital listening and watching are the only media worth discussing.”
Radio, says Marketron's report, is positioned to gain revenue from political ads, which for the 2024 election have already brought in $43 million for radio as of late November, according to data cited. “Even though it’s a national race, most spending will occur at the local level, even for the presidential campaigns.” the report says, “because nominees will spend much more in swing states [such as Arizona, Georgia, Nevada, North Carolina, Pennsylvania, Michigan, and Wisconsin].” Marketron recommends salespeople should “complement radio with digital ad tactics to increase the total campaign revenue amount, [and] prioritize the tightest races when prospecting media buyers.”
Other ad categories poised to increase local ad spend this year, according to the outlook, include retail, real estate, local auto dealers, financial services, and health care. Across all the above, the report reminds execs that “there’s always a chance to grow [these] by ensuring they know radio drives results for just about any ad goal. Top radio advertisers have new challenges and concerns; be ready to address them with ideas on how to be more strategic with the creative. Presenting new angles for radio spots and collaborating with on-air talent can make a station more appealing to advertisers.”
As to the bigger picture of the 2024 economy, Marketron's forecast sees “cautious optimism,” as “analysts predict inflation continuing to ease and GDP growing,” noting a source pegging U.S. retail growth at 6.5%. The report stresses, however, that while economic forecasts are “the story of Wall Street, radio operates more on Main Street. A specific market and its growth or retraction will inform how local advertisers spend their dollars. Any customer will have objections to ad spend no matter how the economy is performing, [but salespeople] can overcome these with data on radio’s reach, ROI, cost-effectiveness and power to influence consumers.”
The report makes one more key recommendation to station sales staffs: become experts at selling radio and digital together, noting that “it increases your share of wallet, and allows you to expand the types of companies you prospect.”