Podcast is helping provide some “sizzle” to radio and that is one reason GroupM thinks radio should experience “significant growth” during 2021 and “return towards the prior trajectories.” GroupM is projecting radio advertising will grow 7.6% this year. “Newer forms of radio – including podcasting, but also streaming audio services – help provide some ‘sizzle’ to the medium, although the local orientation of radio’s advertiser base constrains growth,” said GroupM’s Global President of Business Intelligence Brian Wieser.
Podcasting may be the “sizzle” that provides the fuel for growth. A recent Whistle Wise survey shows that podcast listeners have a favorable opinion of advertisers. In fact, 61% say they have considered a purchase because of an ad they've heard on a podcast. And 78% say they don’t mind ads or sponsorships because they recognize this type of support funds the podcast.
Meanwhile, GroupM is revising its outlook for overall ad growth. It now expects the U.S. ad market to grow 15% compared to last year when the impact of political advertising is removed. That’s an improvement over its earlier 12% forecast released in December. Just as noteworthy is GroupM thinks 2021 ad spending will be six percent above 2019 levels.
“Our upgrade of expectations is primarily a reflection of the healthier-than-expected recovery of the economy from the depths of the pandemic paired with the significant impact of fiscal stimulus the federal government is providing to consumers,” said Wieser in an update. “In 2021, the American advertising industry is poised to regain all that it lost in 2020 and more.” He credits a strengthening economy with “meaningful” improvements over where things were at the end of last year.
Elaborating further on the economy, the United States is more favorably positioned for 2021 now vs. where it was at the end of 2020.
Digital advertising overall is forecast to grow 22% this year as large brands shift spending into digital media to support ecommerce activities. Digital media was one of the bright spots last year with Magna estimating the segment had a 7.3% growth rate in 2020.
Especially good for audio – and local radio in particular – is Magna thinks small businesses could be a bigger part of economic activity. Weiser points out there is the growing numbers of small businesses which have emerged during the recovery. “Each of them is likely to spend some amount on advertising, even as all small businesses collectively lose share of economic activity relative to larger ones,” he said.