Consensus Forecast: Radio Revenue To Increase 6 to 8 Percent

As the end of 2021 nears, the CUMULUS MEDIA | Westwood One Audio Active Group assessed leading revenue forecasts and key trends to watch for in the coming year.

Here are the key takeaways:

• 2022 revenue forecast roundup: AM/FM radio growth consensus +6% to +8%; Podcasts to the moon
• Speaking at last week’s Radio Ink Forecast 2022 conference, Mark Gray, CEO of Katz Media Group, said national spot radio revenues are expected to grow +5% to +6%, not counting digital and political. Gray notes that since the pandemic, every quarter has seen improvement. 2022 national AM/FM radio revenues are expected to come in at 88% to 89% of 2019 levels. Gray says political could top $300M for AM/FM radio in 2022.
• Speaking at the same conference, Doug Ray, Chief Product Officer at dentsu international, the major media agency, estimates +10% increases for audio in 2022 with most of the growth coming from streaming and podcasts.
• PQ Media says, “Total audio ad spend, of which over the air accounts for 70%, is not expected to reach the pre-pandemic 2019 level until 2023.”
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  Ad spend is projected to increase +6% in 2022 as “demand is returning to radio” coming off +25% growth in 2021, according to MAGNA. “The economy is very strong right now and we see every vertical increasing spending.” Most workers resuming commuting, a full year of high vaccination rates, and growth of new verticals such a sports betting are other drivers.
• BIA/Kelsey Vice President and Chief Economist Mark Fratrik says AM/FM radio advertising revenue in 2022 will grow +8% and hit $13.4 billion. $11.5 billion will be from over the air and $1.9 billion will be from digital.
• Daniel Day, Equity Research Analyst, Media & Communications at B. Riley Securities, predicts sequential improvement in spot radio revenue along with “robust digital growth, and an improved outlook for political ad spending.” Day says 2022 will be buoyed by “especially strong” political ad spending and increases in broadcast political estimates to 90% of 2020 levels. Growing political ad revenue in even years is “a structural trend rather than a one-time boost.”
• eMarketer calls for +11% growth in digital audio in 2022 and +6% growth for AM/FM radio.
• IAB/PwC forecasts podcast advertising to grow +31% from $1.3 billion in 2021 to $1.7 billion in 2022.
• The “big ten” advertising categories that represent 60% of local AM/FM radio revenue

Of the 44 local advertising categories tracked by Miller Kaplan, ten generate 60% of station revenues:

• Auto dealers/manufacturers/rentals
• Professional services
• Healthcare
• Charitable/religious/non-profit/government agencies
• Financial services
• Casinos/lotteries
• Insurance companies
• Communications/cellular/public utilities
• Television/networks/cable providers
• Home improvement

Compared to 2019 spend levels, five of the ten categories have already recovered or are close to recovering (professional services, financial services, casino/lottery, insurance, and charitable/government). Sports betting (part of casinos/lottery) has shown considerable growth for AM/FM radio. The five categories to watch for 2022 improvement are auto, TV/cable, healthcare, home improvement, and communications/cellular.