The COVID-19 pandemic has whacked local businesses and shrank marketing budgets. But a new forecast of 2020 advertising spending by Borrell Associates shows podcasting and streaming audio as the only segment of media that it tracks on pace to see revenue growth this year. The firm estimates total podcast industry revenue will climb 1%. That compares to a projected 6% drop in overall digital ad spending.
Borrell said it doesn’t mean the podcast industry is completely immune from the impact of the coronavirus shutdowns, however. “We saw a bigger increase before COVID,” VP Corey Elliott said during a webinar on Tuesday. Borrell had earlier forecast total streaming audio revenue would grow by 17% this year.
What is helping podcasting and streaming audio weather the storm is the number of small and medium-sized businesses that said they have bought more digital audio advertising since the onset of COVID-19. Borrell said its survey of those local advertisers this month found that 17% have increased their podcast and streaming audio ads spending in recent months. And even more encouraging for the industry is 7% said they had bought their first-ever podcast and streaming audio ads since the pandemic squeezed budgets.
Borrell Associates President Gordon Borrell said a “short, sharp” recession of three to four months has been predicted for the past year and the COVID-19 situation may have simply triggered that downturn. But he also said their data suggests a recession timeframe that spans “a lot more” time is also among the realm of possibilities.
Even as the impact of the pandemic has worsened in recent days and several states have either slowed their reopening or hit reverse, the pandemic will one day end. When that happens, podcasters have good reason to be optimistic.
Nearly one in four local advertisers surveyed by Borrell said they will spend more on podcasting and streaming audio after the COVID-19 pandemic ends than they do today. The Borrell survey also shows 11% of local advertisers expect to start spending on podcasting and streaming audio for the first time once the impact of the coronavirus on their businesses has passed.
“Small and medium-sized businesses want to get the word out, they need to, and that’s why we see local advertising falling but we don’t see it completely collapsing,” said Elliott.
Borrell Associates updated its overall outlook for U.S. local advertising on Tuesday. Its original forecast had called for a 1.3% growth rate in 2020. But because of the pandemic and the impact on local business spending, the firm now estimates overall local ad spending will decline 13.1% this year. A bigger drop will occur among traditional media than with digital media, according to the forecast. Elliott said Borrell had already seen the digital ad spending growth curve flattening, something the firm thinks will occur, with an eventual turn back toward growth by 2024.