Industry leaders are optimistic radio will return to growth in 2021 as the COVID vaccine slowly rolls out and Americans begin to resume activities put on hold for most of 2020. But the pace and magnitude of the turnaround are the subject of debate among senior radio execs contacted by Inside Radio for our annual Outlook series. In addition, radio needs to diversify its revenue mix, they say, and rely less on a handful of categories that have long sustained it, to make for a more recession-resistant industry.
“As live and local events return, we anticipate an influx of advertising dollars to follow and are optimistic about radio revenue bouncing back. We have seen several early indicators to support this optimism,” says Tina Murley, recently named VP of Sales at Beasley Media Group. “Our core advertisers have committed to return and we are adding new categories such as sports betting that will fuel radio’s growth.”
Steve Goldstein, Senior VP of Digital Sales Strategy at Hubbard Radio, is also calling for a “strong rebound” in local radio advertising in 2021, predicting double-digit growth over 2020. Erik Hellum, COO, Local Media at Townsquare Media Group, says the goal is to get back to the baseline of 2019 revenues and then grow quickly from there. “I am confident that we will do that, but it’s going to take a lot of hard work, finally breaking free of our overreliance on certain key categories,” he says.
Calling 2021 a “build-back year,” David Kantor, CEO, Radio Division, Urban One, believes it will take time for enough Americans to be vaccinated to develop some semblance of herd immunity. “We need a return to a ‘more normal’ for radio to get its revenue engines roaring at top speed,” he contends, predicting that the first and second quarters will still be “significantly affected” by COVID before the business strengthens in the third and fourth quarters.
With anticipation high that life can return to a more normal state, perhaps as soon as mid-year, iHeartMedia Chairman and CEO Bob Pittman envisions a robust ad recovery for radio. “It’s likely that consumer demand – pent up during the pandemic, as evidenced by consumers gathering and spending whenever allowed – will return strongly, and when it does, advertisers should be looking to broadcast radio as the fastest and most effective way to reach those consumers,” Pittman says. “Given this, I’m optimistic that radio revenue will recover strongly during 2021 and perhaps even exceed where we originally thought it would be in 2021.”
With consumer cravings to travel, eat out and attend events bottled-up and ready to burst, Entercom Chief Revenue Officer Bob Philips also sees a brighter path ahead for radio. “There is tremendous pent-up consumer demand which should fuel marketing budgets,” he says. “All signs point to a rebound for advertising spending in general and radio should be a beneficiary.”
Growth Categories
Last year’s lockdowns devastated some ad categories while sending others into over-drive. Looking ahead, with home sales now at historic levels, home improvement and home services are expected to continue to ramp up. “The healthcare industry is primed for growth as non-emergency medical services are allowed to resume,” says Murley. Legal services and sports betting are also expected to be hot this year. And as “consumers apply lessons learned during the pandemic, ecommerce and direct-to-consumer (DTC) are prime candidates for growth, says Philips.
“The key is to continue driving growth in these surging categories while quickly regaining dollars lost in auto, retail and fast food as the pandemic wanes,” says Hellum.
Broadcasters are hopeful that travel & lodging and food & restaurant will make major comebacks in the back half of the year, as pent-up demand fuels growth. But that depends on how quickly – and how many – Americans are vaccinated. “Assuming there is some return to normalcy, the categories that suffered the most in 2020 stand to experience significant year-over-year growth, says Philips.