How big will the radio ad recovery of 2021 be? BIA Advisory Services is putting a number on where it thinks things will land. It is forecasting local radio revenue will total $11.7 billion this year, a 21% increase compared to 2020. And BIA Chief Economist Mark Fratrik estimates local radio will hit $1 billion in online revenue this year, a 9.7% increase over last year.
“The shining star continues to be radio’s online digital advertising revenues, which will outpace over-the-air growth this year and moving forward,” said Fratrik. “Those broadcasting groups that have invested-in and oriented their companies toward digital will benefit faster from that foresight.”
The industry’s bottom line took the expected hit in 2020 due to the pandemic and a pullback in advertising spending. But the size of the decline may not be as large as some anticipated based on what some public companies reported last year. BIA estimates total over-the-air advertising revenue dropped to $9.7 billion, a 23.6% decline compared to the $12.8 billion billed by local radio in 2019. Digital ad revenues at stations demonstrated their continued strength, posting only a slight decline to $939 million in revenues in 2020 versus $1 billion in 2019.
“Local radio stations have been feeling the impact of new competition for the past few years,” said Fratrik. “Unfortunately, the pandemic just exacerbated the problem, and it will take some time to recover.”
BIA’s 2021 Investing In Radio Market Report also details the impact of the pandemic on the deal market. The firm says mirroring the economic climate in 2020, radio station sales fell to levels that have not been seen in years. Only 534 radio stations were sold in 2020 by BIA’s count, for an estimated value of $139 million. That was in stark contrast from the 1,080 sold in 2011 for $1.1 billion.
BIA’s U.S. Local Advertising Forecast 2021 predicted earlier that total local ad revenue across all media will reach $137.5 billion in 2021. That marks a 2.5% year-over-year increase from the firm’s final post-COVID estimate for 2020 of $134.1 billion and it reflects businesses starting to adapt and rebound from the pandemic lows.
BIA projected local radio’s share of spending will be 9.2% this year with direct mail, mobile, online and television each getting a larger slice of the local ad pie.