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Radio Poised For 5.6% Revenue Growth In 2024.


Bolstered by improving economic trends and increased spending in key categories, Noble Capital Markets is forecasting radio revenue growth of 5.6% in 2024, including political advertising. In its fourth quarter Media Sector Review, the investment firm says December 2023 “may have been the trough for this economic cycle.” Based on the radio companies it closely follows, Noble Capital says it expects radio advertising trends “to improve throughout the year.”


The Fed is expected to lower interest rates late in the first quarter and that is likely to improve the economic climate for both local and national advertisers. “Even though the economy is anticipated to continue to weaken in the first half 2024, advertisers may advertise to drive customer traffic in anticipation of improved economic conditions,” says the report written by Noble Media Equity Research Analyst Michael Kupinski. Radio is poised for a “weak” start to the year with first quarter revenue expected to be down but by a “more moderate” 3-4% year-over-year decrease.


Growth Forecast For Auto, Financial


While the report calls for consumer spending to soften, having an adverse effect on retail advertising, Noble Capital anticipates auto advertising “to buck that trend.” Automakers and dealers are likely to increase radio advertising and promotions to lure consumers, Kupinski’s report predicts. “Assuming lowered interest rates, we expect that the financial category should improve in the second half of the year as well.” The turnaround is expected to be weighted to the second half, thanks to improving core ad trends and the benefit of an influx of political advertising.


As industry leaders know all too well, radio doesn’t typically pocket a significant amount of political advertising. Still it accounts for a “meaningful” 3% of total core advertising for the year. Most of that arrives in the third and fourth quarters.


But it’s not just record political spending that will benefit radio in the second half. “National advertising trends should improve in the second half as economic prospects improve,” Noble Capital says. Digital advertising is on track to continue its growth streak, albeit more moderately than in 2023, with a 6% bump in 2024. “We believe that Digital will increase near 5%, but some companies that have less developed digital businesses, should report faster growth,” per the report.


2023 Advertising Downturn


Noble Capital’s radio outlook for 2024 is far more upbeat than its estimates for 2023, which point to a 5.5% year-to-year radio advertising decrease last year. “This decline reflected the adverse impact of rising interest rates and significant inflation, which hurt many consumer-oriented advertising categories, as well as financials,” the report concludes. Local radio advertising (down 6%) “was more resilient” than national advertising (down 19%), which “tends to be more economically sensitive.” Radio’s 2023 results were negatively impacted in year-over-year comparisons by a lack of political ad dollars. Last year’s bright spot was digital, which increased 6% and largely offset the decline in national revenue. 


While radio endured a mid-single digit decline in 2023, things were worse for television. “The Television industry had a tough year with soft core advertising and the absence of the year earlier political advertising,” Kupinski writes in the report. He estimates TV revenues fell by as much as 20% in 2023. Factoring out political from the comparison, total core television advertising is estimated to have declined 3% in 2023. That reflects “disproportionately weak national advertising and resilient local advertising.” But advertising accounts for less than 50% of total television revenue, with retransmission revenue making up most of the balance. Rolling in retransmission dollars, Noble Capital estimates total television revenue declined roughly 10% in 2023. 


With TV getting the lion’s share of political ad spend, the 2024 forecast is for total TV advertising to jump nearly 30%, more than making up for an anticipated 2.3% decrease in core advertising.

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