Some Group Heads See Less COVID Disruption In Smaller Markets.


Are smaller markets experiencing less of the brunt of the COVID-inflicted advertising downturn than their large market peers? The CEOs of a trio of publicly traded radio companies say that was indeed the case during the third quarter.


For Cumulus Media, the trend first surfaced during the second quarter, which marked the deepest trough for ad cancellations. CEO Mary Berner said the company’s diary markets out-performed its PPM markets in both the second and third quarters. The company’s PPM markets, which include Chicago, Atlanta, Dallas, Detroit, Cincinnati and others, “experienced more acute impacts from shutdowns,” Berner told analysts on the company’s second quarter earnings call. She reiterated the assessment last week when discussing third quarter results. “Like last quarter, our diary markets, which were less affected by the pandemic shutdowns, outperformed our PPM markets.”


Saga Communications CEO Ed Christian observed a similar phenomenon at his company, which is heavily tilted to small and medium markets. It also operates in a handful of markets ranked No. 26-50, including Columbus, OH; Milwaukee; and Norfolk. In big markets, he said last week on Saga’s quarterly earnings call, “there is a fear that they have reached a new norm, which, in the larger markets, is running like minus 20 from comparable years. And the fear is that this is going to be where they are.”


But in the secondary markets where the vast majority of Saga’s stations are located, “it's more down in the lower teens – 12%, 14% – and holding kind of right there for now,” he said. Whether the pattern continues will depend on where the economy goes, Christian said. “But it seems that the larger markets are getting hit harder than the secondary markets where you have more ball control over what you do in terms of sales, where you can be creative. And you have a smaller universe to play in, but a bigger playing field within that universe itself.”


That sentiment was echoed by Townsquare Media CEO Bill Wilson, whose company operates exclusively outside the top 50 markets in places like Amarillo, Cheyenne, Kalamazoo and Wichita Falls. Despite steady cume levels, radio has experienced some modest time spent listening declines, even before the pandemic hit. But Wilson says TSL for Townsquare has been “quite stable the last two years, even though the industry is declining.” He chalked that up to a combination of the company’s smaller market size, “where radio really matters,” and the companionship role that on-air talent play in small market America. They are “now the fabric of the community where people tune in every day to be informed and entertained, which is quite different, in my view, in large market America.”


Data from firms that track the number of miles travelled supports the claim that smaller markets were less negatively impacted by COVID shutdowns. Miles traveled and consumer movement data reveals medium and smaller markets were not impacted as much as the large markets. In September, Geopath reported that over the last six months, smaller and medium markets saw little, if any, decreases in vehicle miles travelled due to the pandemic. In markets 26-100, average miles traveled in September was 29% to 39% greater than 2019. Markets outside the top 100 experienced significant growth in miles traveled, +48% to +54%. That compared to smaller gains in larger markets: +11% for the top 10 markets, +17% for markets 11-25.

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