The improving ad environment continued in July, with Audacy reporting revenues up 27% year over year for the first month of the third quarter. “We are encouraged by the current pace that we are writing business,” CEO David Field said during a call with analysts Friday. “That can sometimes be more of a leading indicator than historical results from the previous quarter.”
During July Audacy wrote 7% more business for the third and fourth quarters than it did in the same period in July 2019. That’s the first month since the pandemic where that has occurred, Field said. He said business is pacing up 10% from second to third quarters and its business in the third quarter is tracking up 25% over a year ago. “We believe we are on a way back to a full recovery,” he told analysts.
Second quarter also saw the return of hundreds of advertisers who pulled out due to the pandemic. Comparing June 2021 to March 2021, the number of active spot advertisers on air was up by more than 1,000 or about 19%. “Normal seasonality typically adds less than 200 advertisers in June versus March,” Executive VP/CFO Rich Schmaeling said. Spot ad revenues grew 16% in June over March.
Key Categories Improve.
Audacy reported big improvements in some key local ad categories. As live events return for consumers ready to rock again, the concerts category shot up over 300% in June when compared to March, triple the normal seasonal increase. And casual dining ad sales surged 65% over the same time period, a category that normally doesn’t change all that much from March to June. “These key categories that require people to get out and go somewhere amongst other people are springing back to life,” Schmaeling said.
But the recovery hasn’t touched all ad categories, including auto which is suffering due to the chip shortage that has depressed inventories.
Digital revenues grew 41% to $58.4 million from $41.3 million In Q2, driven by growth in podcasting, digital audio, and digital marketing solutions. Field said their expected rebound in Audacy’s podcast business during second quarter “exceeded our own expectations” after the segment took a hit during the first quarter due to a lighter than normal calendar of releases and Pushkin Industries’ jump to iHeartMedia. The podcast studio co-founded by Jacob Weisberg and Malcolm Gladwell previously had a deal with Audacy’s Cadence13 to sell its advertising.
Schmaeling said as Audacy’s podcast business grows, he expects it will sell more of its ad inventory through programmatic platforms. “There is a lot of interest in demand side platforms (DSPs) to get access to audio supply,” he told analysts. “We think there is an opportunity to expand the exposure of our inventory.” He said that will also help expose more brands to buying over-the-air ads on the company’s radio stations.
Digital overall represented 20% of company revenues in the first half of 2021, twice as much as its 2019 contribution. Streaming monthly active users grew 24% compared to 2020, overall streaming total listeners hours were up 9% year over year, led by a 31% boost in smart speaker listening.
Sports Revenue Grows By Triple Digits
Given its portfolio of many of the country’s biggest sports stations, sports has become one of Audacy’s largest growth sectors. With the return of live sports, revenues derived from the company’s sports assets shot up 157% year over year. All in, revenues from sports, including the BetQL app, deals with FanDuel and other sportsbooks, and sports radio and network advertising amounted to 21% of Audacy’s total revenues in Q2.
Sportsbook advertising is playing a role in that, with Field saying that its sports betting business is growing “at a very rapid pace,” up by more than 50% with expectations that it will become a $100 million ad category for the company in a few years as more states legalize sports betting.
Audacy’s overall revenue surged 73% year-over-year to $304.5 million during the second quarter, compared to $175.9 million in last year’s COVID-hobbled Q2. Spot revenues nearly doubled to $202.8 million. Network revenue improved 23% to $20.6 million. And sponsorship and event revenue rose 50% to $10.8 million.
“It was a strong quarter of strategic progress and pandemic recovery across our company as we continue to build, transform and meaningfully enhance the organization,” Field said. “We are emerging from the pandemic as a meaningfully stronger and better positioned company with enhanced growth potential, building on our core strengths and capabilities and our unique asset mix.”