Broadcasters Are Optimistic as Q2 Gets Underway.
There are more cars on the road, live events and baseball are back, workers are returning to offices, and pent-up travelers are booking vacations. As the country approaches a new post-pandemic reality, broadcasters are optimistic about the business climate for the second quarter, all while keeping a close eye on the war in Ukraine, inflation and their potential impacts.
“At Beasley, we are seeing a positive shift in advertiser sentiment that is contributing to an improved business environment,” says Beasley Media Group CEO Caroline Beasley. Pacings are strong and year-over-year ad sales are up by double digits, she adds.
After positive over the air radio pacings for both local and national in the first quarter, rep firm Katz Radio Group expects the trend to stay positive in Q2. That includes strong growth for digital audio. “While business continues to break late, there are a lot of reasons to be optimistic about second quarter,” says President Christine Travaglini. “At the same time, there continues to be the uncertainty we’ve learned to live with the past two years around COVID-19, supply chain challenges, inflation and the ongoing war in Ukraine.”
While those uncertainties are affecting the lives of consumers, Audacy Chief Revenue Officer Brian Benedik sees encouraging signs ahead. “The U.S. consumer is back to mostly normal activities and spending across physical and online channels,” he says. “We are optimistic with the business environment moving into Q2.” Benedik says ad sales are healthy across the company’s over the air, digital and live events platforms. “Our new Audacy Digital Audience Network (ADAN) has been well received by our partners as we make it easier to invest in our streaming & podcast content,” he says.
NRG Media Chair and CEO Mary Quass is also seeing a strong start to the quarter. “We are pacing ahead of last year for Q2 by double digits and are pacing low double digits for Q3, Q4 and the year,” she says.
At Alpha Media, President and CEO Bob Proffitt says pacings are slower than he’d like, similar to what they experienced in January for first quarter. “National is off, local is stronger, there is optimism yet caution, and supply chain woes seem to be a little better,” he says. “Some parts of the country are better than others.”
At rep firm Gen Media Partners, which works with independent radio owners, CEO Kevin Garrity says second quarter is “pacing ahead and progressively getting better, with May and June looking particularly strong.” That’s especially noteworthy, he points out, when compared to this time last year when there was a lot more Health & Human Services spending by the federal government. “That indicates that our core business is strong and gives us a solid foundation to continue to work hard for our radio station partners,” Garrity says.
Apart from the pace of bookings, executives say the tone in the country is starting to change and that is making for an improved business environment. “I've been on the road and felt it – pent-up demand, people ready to interact with one another, fatigue of zoom and isolation, clients ready to talk strategy, competitive juices firing up for share,” says Proffitt.
Dormant Categories Bounce Back
Among categories with strong pacings in Q2, broadcasters single out online gambling, healthcare, telecom, recruitment, consumer products, professional services, and retail, among others. With COVID starting to transition from pandemic to endemic, the live events and travel/tourism categories are roaring back. That has made entertainment one of the biggest year-over-year growth stories for some broadcasters. “Many of the advertising categories that were dormant because of the pandemic are starting to turn,” says Garrity.
While still challenged due to inventory shortages, the crucial automotive category is starting to show some green shoots. “After a sharp decline in the automotive category due to the chip shortage, we are seeing tier one, two and three automotive advertising return,” says Beasley. But many don’t expect automotive to truly recover until the second half. “We are anticipating automotive spend to pick up in the back half of the year as the supply chain improves,” says Travaglini.
And while the political windfall from this year’s midterm elections will be heaviest in the second half, there are 29 states kicking off primaries in the second quarter.
AM/FM has historically been under-utilized by campaigns, but their over-reliance on TV helps radio indirectly. “The political ad clutter on TV traditionally helps us migrate non-political advertisers into radio and streaming audio to take advantage of the cleaner ad environment in radio,” says Travaglini. “Political advertisers themselves should be looking to take advantage of radio and audio streaming to claim an outsized share of voice in the politically less cluttered environment.”
As the country emerges from seclusion, no medium is better suited to give people a reason to congregate and celebrate than radio. “Radio has always been a medium that connects our friends to one another, and now we are inviting our friends to come together and see each other,” says Quass. Adds Garrity, “People want to attend events and concerts, and they want to see their local radio stations in and around their community.”
As baseball and live events return, radio has an array of sponsorship opportunities to offer clients, says Travaglini. “Event and concert sponsorship packages give brands the chance to be visible and featured at huge in-person live events,” she says. Adds Benedik, “We are really excited to bring our community back together to enjoy live events.”
With the industry preparing to gather face to face for the first time in years at the NAB Show this month in Las Vegas, Proffitt says he’s noticed an encouraging trend. “It feels from my perspective that radio as an industry is finally working towards taking share from social, digital, newspapers, cable, direct mail, TV – and not each other,” he says. “It still happens but the opportunity to grow the overall pie in radio and its share of advertising spending is enormous. Lots of operators get and understand that, both on the spot and digital sides.”