Radio companies investing in podcasting will see the payoff in 2020, at least when it comes to helping the medium maintain its revenue intake. The global ad agency GroupM has released its outlook for the coming year and it credits the “emerging category of podcasting” as well as a “growing interest” in audio from national advertisers with helping radio hold its own. Those trends are especially important since Brian Wieser, GroupM’s Global President of Business Intelligence, says the traditional base of local advertisers that support locally-focused media like radio has “weakened” in recent years. “Radio is likely to be flat going forward,” said Wieser. “Radio appears set to hold on to its revenue base this year and is not likely to grow by much any time soon.”
GroupM is forecasting U.S. radio revenue—including audio segments like podcasting and streaming audio—will edge up 0.2% in 2020 to a projected $16.7 billion in total revenue. Audio’s share of overall ad dollars is estimated to slip a bit, falling from 6.8% this year to 6.5% next year. And GroupM sees radio revenue posting an average 1% growth rate each year through 2024.
GroupM says U.S. advertising is on track to increase 6.2% to $244 billion for 2019. “This will mark a fourth consecutive year of solid mid-single-digit growth for the industry,” said Wieser, who notes growth has been “robust” compared to overall economic growth which has been decelerating. He said 2020 still “looks solid” and forecasts total U.S. advertising will increase 4% next year, despite “some softening” in the economy in part because he expects the trade war will become “a drag” on business.
“Digital-first marketers are likely driving much of the industry’s recent growth,” said Wieser. But he also thinks that the segment’s rapid growth rates “should abate” somewhat next year when GroupM forecasts a12.8% revenue increase for digital. That compares to 19.9% this year. Still, it is forecast to reach $127 billion and represent a 50% share of the total spent by marketers overall. “Growth is still expected to be resilient next year,” Wieser said. “There is undoubtedly still room to grow.” GroupM thinks outdoor will be the fastest-growing traditional media, increasing 8% in 2020 while double-digit declines are likely to persist for newspapers and magazines.
In terms of political advertising, GroupM is forecasting the presidential campaign cycle will help the total reach $9.8 billion. But based on fundraising trends, Wieser says that estimate may prove to be too low. – Frank Saxe