Positive signs and guarded optimism are the watchwords for radio broadcasters as the New Year gets underway. On the heels of indicators from Borrell and WARC that advertisers are upbeat heading into 2024, along with generally upbeat economic news, executives interviewed for Inside Radio’s Outlook 2024 series say they sense a cautious optimism among local clients in a number of key categories and that business looks better now than it did this time last year.
“It varies by market and areas of the country, but there is clearly more optimism coming from our market managers as it relates to business than there was even just a few months ago,” says Bob Proffitt, President & CEO, Alpha Media. Dave Santrella, CEO of Salem Media Group, says pacings are “strong” for both traditional and digital revenue buckets, although digital is outpacing traditional. Erik Hellum, Chief Operating Officer for Townsquare Media, predicts 2024 “will be just the beginning of an ad recovery that we believe will accelerate throughout 2024 and into 2025.”
Sharing their optimism is Tina Murley, Chief Revenue Officer, Beasley Media Group. “We have seen political advertising spend in some of our key markets, automotive spending is healthy, and categories such as legal and sports betting continue to grow,” she says.
The hopefulness is being felt at the rep firm level, too. “Our internal data shows growth in planning activity, budgeted avails, and rate inquiries across all platforms,” says Greg Tacher, Executive VP, GMP Radio Reps. “Anecdotally, in conversations with our agency clients, advertisers, and other media partners, many are expressing that 2024 will see growth in media spend.”
Diversity In Growth CategoriesRadio’s upfront selling season was generally strong, these execs say, and the focus in 2024 is bringing back some of the categories that underperformed in 2023. “Pacing across all sectors of our business are in line with norms for this time of year,” Tacher says. “We see most clients returning for Q1, and some new ones jumping into the mix from consumer products, retail, and AG.”
Among the ad categories best positioned for growth in 2024 are automotive, banking/financial services, restaurants, real estate, travel, technology, job recruitment, professional services, home improvement, legal, education and, in certain states, sports betting. “If we see a dip in interest rates, I think we will see the mortgage business come back because there will be a good amount of people that have bought homes at an interest rate that can be refinanced,” Santrella predicts.
At medium and small market specialist Townsquare, the biggest growth during the past three years has come from the services category, especially the contractors/builders and home services sectors. Hellum forecasts that will continue into 2024. “Most recently, we’ve seen the beginnings of a surge in the attorney/legal services category, along with a notable increase in activity within the job searchers/recruitment sector,” he says. There’s also a resurgence in the gambling/casino category while Townsquare markets in the Western region are experiencing an uptick from the farming and agriculture category.
With record-setting political ad dollars on the horizon – AdImpact predicts radio will capture $400 million in political spending, or about 3.5% of the ballooning election pie – broadcasters are expecting a vigorous second half. “The obvious and most significant growth category for both the industry and Beasley is political,” Murley asserts.
Digital Priorities
While campaign 2024 is likely to bring a late-year bounty, radio is relying on digital to drive growth year round this year. Broadcasters are focused on growing the proportion of their revenue derived from digital and many expect this to be their biggest digital revenue year yet. Where companies sit on the digital spectrum varies greatly, from latecomers like Saga Communications and Alpha Media on the lower end to “digital first” players like Townsquare at the top. “Since digital represents 52% of our total revenues and 56% of our total profits, it is the foundational part of our revenue mix and will continue to be our growth driver in 2024,” Hellum says.
Radio’s digital products menu has never been longer, ranging from O&O assets like social media marketing, mobile push notifications and email marketing to such third party offerings as organic and paid search, OTT/CTV, email, and display.
Says Salem’s Santrella, “Digital continues to play a growing role in our revenue mix, and we have aggressive goals in 2024 since we look at this as the growth engine for our company.”
With advertisers more focused on ROI than ever before, broadcasters are relying on new attribution tools to help throttle spending levels. Murley predicts the audio industry will lean harder into first-party data and audience segments in 2024. “Advertisers are looking for the type of targeting and attribution they see in the digital space and the audio industry will work toward solutions to provide that,” she says. “We will also see broadcasters utilize various AI solutions to increase efficiencies in content, sales, and operations.”
With radio dominating the growing audio platform, Proffitt is bullish about 2024. “With radio’s reach exceeding that of linear TV for the first time ever—and who would have predicted that a few years ago—we believe audio in general and radio, in particular, is poised for solid growth in 2024 and beyond,” he says.