The newly released S&P Global Market Intelligence Radio & TV Annual Outlook from Kagan finds some good news in this year's ad-revenue outlook and some not-so-good news for the next five years, as core advertising categories continue to slump.

The study forecasts that U.S. TV and radio stations will reach $36.19 billion in total advertising revenue in 2024, up 9.3% from $33.10 billion in 2023, primarily from the influx of record political ad spending in a presidential election year.

S&P Global Market Intelligence Kagan's 2024 projection also shows $24.95 billion from TV stations — including core national and local spot, political and digital/online — and $11.24 billion from radio stations, which includes national and local spot and digital, excluding network and off-air.

However, the report predicts negative growth for TV advertising over the next five years as traditional media continues to lose advertising share.

Amid those declines, the report finds that the local ad market continues to be stronger than the national side of the spot ad business, thanks to broadcast stations’ close ties with the local community.

That will help stations as ad agencies and major brands continue to shift budgets to digital-native platforms as more content moves from linear to streaming.

Even so, core ad categories, including automotive, retail and travel, have continued to see softness due to high interest rates and inflationary pressures dampening consumer spending on big-ticket items. Pharmaceuticals, telecom and professional services continue to outperform other ad categories.

Key highlights from the report include:

• TV stations’ core local and national ad revenue is expected to decline slightly this year by 0.3% to $17.58 billion, with local spot up 1.5% and national spot down 4.5%, while digital could climb 3.0%.
• With the influx of $4.09 billion in political ads in a presidential election year, total TV-station ad revenues are expected to grow 14.1% to $24.95 billion.
• TV-station ad revenue over the next five years is projected at a negative 2.1% compound annual growth rate (CAGR), hitting a high of $25.57 billion in 2028, and then dipping 12.5% to $22.39 billion in the 2029 nonelection year. This five-year CAGR is lower than the 2023 outlook, given that it starts in a presidential election and Summer Olympics year in 2024 and ends in 2029, a nonelection year.
• Over the 2024–2029 projection period, the core national spot ad market for TV stations is expected to decline by a CAGR of 5%, with local spot up 1.5% CAGR, while the ebbs and flows of political ad spending in election years are reflected in the peaks and valleys of total TV station ad revenue.
• The radio station industry’s five-year ad outlook, driven more by the local market and less by political ad uptick, is expected to decline 3.7% in 2024 to $11.24 billion, excluding network and off-air revenue.
• As radio advertising continues to shift to streaming audio and podcasting alternatives, S&P expects a 5% CAGR decline in national spot and a 3.6% CAGR in local spot, as digital ad growth of 5.9% CAGR offsets larger declines with total radio ad revenue contracting to $10.08 billion by the end of the projection period in 2029.

NEW YORK—A new study from the IAB is reporting explosive growth in podcast ad revenue, which hit a new high in 2021 at $1.4 billion, and is forecast to exceed $2 billion in 2022. 

The study also forecasts that podcast ad revenue is expected to hit $4 billion by 2024, growth that should bolster some of the investments TV news operations have been making in the medium. 

The sixth annual IAB U.S. Podcast Advertising Revenue study, prepared for IAB by PricewaterhouseCoopers, also reported that podcast advertising grew 72% faster in 2021 than the total internet ad market. 

“Everything right now is aligned to drive growth. There’s more engaging and diverse podcast content than ever, and that is translating into larger, more attractive audiences,”  said Chris Bruderle, vice president, research & insights, IAB.  “But more than anything, podcasting has proven that it can deliver beyond direct-to-consumer advertising to support brand-building and drive business outcomes.”

The researchers found that the growth was being driven by three factors: more growth and more content; increased use of automated ad tech and growing investment across more ad categories. 

The share of ad revenue served via Dynamic Ad Insertion (DAI) has almost doubled in two years to 84% as now both host-read and announcer-read ads are largely being served with this functionality (84% and 85%, respectively), the report noted. 

In addition it found that the share of ad revenue generated within categories with lower spend volumes has more than tripled in just two years from 8% to 28%.

More information and the full report can be found here.  

WASHINGTON—Local TV stations had a saving grace during the height of the coronavirus earlier this year as ad revenue was dropping, retransmission fees. According to a Pew Research Center report on the second quarter of 2020, local TV stations’ gain from retrans fees outperformed what they lost in ad revenue.

Studying the revenue reports from Sinclair, Tegna, Nexstar, Gray and E.W. Scripps—which together own or operate more than 600 stations in the U.S.—Pew found that their ad revenue fell by a median of 24% (Nexstar’s year-over-year numbers do not include former Tribune stations as the companies merged post Q2 2019). Even in a presidential election year, for all station groups but Gray, ad revenue was down from the mid-term elections in 2018.

But retransmission fees paid by cable providers negated these losses, as the median year-over-year increase for the five companies was 37%, helped by an increase in viewership during the early days of the pandemic. Pew says that this equates to a median increase of $87.3 million in revenue; Pew estimates that ad revenue dropped $67.9 million during Q2.

Sinclair was reported to have the biggest jump, earning more than $1 billion in retransmission fees in Q2 2020, compared to $367 million in Q2 2019.

TV news media overall actually saw general increases in its ad revenue for Q2 2020. Pew found that network TV (ABC, CBS and NBC) saw an 11% increase in ad revenue during the quarter. Cable networks, meanwhile, combined netted a 2% year-over-year increase, but it was a different story for each network, with Fox News Channel seeing an increase of 41%, CNN decreasing 14% and MSNBC dipping 27% in ad revenue.

For the complete study, visit Pew’s website.

NEW YORK—National TV advertising is expected to see a 13.2% decrease in the U.S. market for 2020, with the coronavirus shutdown outweighing the typical gains that political ads generate in an election year, according to a new report from investment and media intelligence resource MAGNA.

MAGNA projects that linear advertising sales—which encompasses linear TV, radio, print and OOH—will see a net loss of 13%, equating to about $83 billion. MAGNA says without political ad revenues ($4 billion), the decline would have come out to -17%.

While linear TV saw a surge in viewing for the first few months of the quarantine, the loss of sports and the greater economic impact on national and local businesses limited the amount of advertising revenue for that period. Now, TV viewership habits are reverting back to their pre-COVID numbers as social distancing restrictions are beginning to ease.

Local TV ad revenue is also slated to see a decline, though at -2.4%.

The recovery between national and local advertising is expected to differ vastly, per MAGNA. National TV is forecasted to see a 4.3% increase year-over-year in 2021, but local TV—with no election helping to boost sales—could see a decline 14.5% year-over-year.

“Many industries face significant economic headwinds and have been forced to cut considerable amounts of spend as a result,” the report reads. “The travel, entertainment, automotive and restaurant industries will be among the most affected, and MAGNA expects each of those industries to reduce linear advertising spend by -25% or more on a full year basis.”

Digital is among the advertising formats that has remained resilient during these times, directly benefiting from increased consumption habits. MAGNA expects for ad spend on digital formats—search, video, social, banners, digital audio—to stabilize in the summer and recover in the second half of 2020 to the point of stability or even some modest growth year-over-year (2%). Digital video is expected to see the most growth at 10%.

Overall, across all platforms, U.S. advertising revenue is projected to decline 4.3% in 2020 and then recover in 2021 with a 4% growth, according to MAGNA.

MAGNA also shared data for global advertising revenue, with linear TV ad revenues shrinking by 12%, and the entire range of global advertising revenues decreasing an estimated 7%.

For more information, the full report is available on MAGNA’s website. 

NEW YORK—Television station ad revenue is expected to grow at a 3 percent compound annual rate over the next five years, according to a new report from Kagan.

Kagan, a part of S&P Global Market Intelligence, said TV stations generated $30.84 billion in revenue in 2016, including advertising and retransmission consent payments. Radio stations generated another $17.7 billion in revenue.

TV advertising revenue is expected to decline 6.5 percent to $21.38 billion in 2017, a non-election, non-Olympic year. But in 2018, ad revenue will increase to $23.43 billion, with the Winter games and mid-term political campaigns.

Kagan said that while political ads will remain important, the TV station business is expected to become less reliant on the traditional spot marketplace, with a bigger share of revenues coming from retransmission and digital, reducing the swings from even and odd numbered years.

This story first appeared on TVT's sister publication B&C. 

CHANTILLY, VA.—Local television stations’ over-the-air ad revenue is expected to get a boost in 2016 as BIA/Kelsey forecasts it reaching $20.8 billion. This would mark a 12.1 percent increase over 2015, which was a down year—falling 7.2 percent from 2014—according to BIA/Kelsey’s report.

All regions of the U.S. are expected to rebound from 2015, with the Midwest expecting the largest increase of 14.6 percent; an 8.4 percent increase is expected in the Southwest, 11.1 percent in the East, 11.9 percent in the West, and 12.6 percent in the South. BIA/Kelsey cites the election and general rebound of the economy as reasoning for the increase.

“The election and economy, driven by stronger employment figures and continuing low interest rates, are helping push local TV ad revenues above expectations this year,” according to Mark Fratrik, senior vice president and chief economist for BIA/Kelsey.

Click on the link to see the full “2016 Investing In Television Ownership Report.”

BIA/Kelsey is an advisor to local media companies.