The consensus among the ad forecasters is radio revenue will increase this year. The only matter up for debate is by how much. The ad agency giant Zenith is out with its latest predictions and it pegs growth for U.S. radio revenue at five percent, estimating industry revenue will recover to $13.28 billion this year. The figures, which do not include radio stations’ streaming revenue, trail the $17.6 billion in revenue radio had in 2019 prior to the pandemic. But that gap will continue to close in 2022 when Zenith believes radio revenue will increase another 0.9% to $13.4 billion.
Digital audio is forecast to have bigger growth rates this year. Zenith predicts internet radio revenue will climb 11% to $2.9 billion as more dollars are spent to target mobile listeners rather than desktop listeners. And it expects podcast ad revenue to jump 26% to $830 million. And both are expected to have more double-digit growth in their future next year as Zenith predicts digital radio will grow another 10% in 2022 and podcasting will increase 18%.
Zenith forecasts overall U.S. ad spending will increase 13.1% this year to $271.6 billion. While internet advertising will grow 25.7% and outdoor revenue will increase 15.6%, radio and in-cinema advertising – which is estimated to double after last year’s theater closures – are the only other big media channels where growth is likely. Without the benefit of political revenue, Zenith forecasts television revenue will decline 4.4% Harder times are also ahead for both newspapers, which it sees losing another 20% of its revenue, and magazines, with an estimated 9.7% decline. The U.S. will be, by far, the largest contributor to global ad growth in 2021, accounting for 46% of the $67 billion added to the global ad market this year.
“After a very tough year last year, the ad market is enjoying rapid and broad-based recovery, and will end this year well above the level it achieved in 2019,” said Jonathan Barnard, Head of Forecasting at Zenith. “Digital advertising is becoming a more effective tool for brand growth as media and commerce continue to move online, attracting greater investment from large brands and small businesses alike.”
On a global basis, Zenith thinks total ad spending will increase at a slightly slower rate of 11.2% this year with global radio revenue tracking to increase four percent versus 2020. It also predicts that digital advertising will account for 58% of global ad spending this year, up from 48% in 2019. It believes that trend has been accelerated as more retail moves from bricks-and-mortar sales to ecommerce.
“Brands have responded by forming partnerships with retailers and creating new direct-to-consumer operations, using performance-driven advertising – primarily in social media and paid search – to lead consumers down the path to purchase,” said Zenith. Still, it anticipates the shift to ecommerce will slow down as coronavirus restrictions lift and economies open up again. “But [it] won’t go into reverse,” it adds.
Looking ahead to 2022, Zenith is forecasting U.S. ad revenue will grow 6.8%. While TV will benefit from a return to political ad dollars, Zenith is predicting just shy of double-digit growth for internet spending. It says the segment will be up 9.9%.