The S&P Global Market Intelligence Radio & TV Annual Outlook for 2024 is out, and the conclusion is simple: political advertising, at a record level, is helping to send total advertising revenue for the year up by some 9.3% from 2023.
Minus those election-focused dollars, however, core ad categories aren’t so active. S&P blames high interest rates and inflationary pressures “dampening consumer spending on big-ticket items.” It didn’t mention the Big Tech dollar siphon that’s presenting a revenue crisis to broadcast media across North America.
Justin Nielson, the Principal Analyst within the S&P arm housing Kagan, authored the report.
He notes that the U.S. broadcast station industry is forecast to reach $36.19 billion in total advertising revenue in 2024, up from $33.10 billion in 2023.
That’s not exactly terrible news. But, Nielson adds that key categories such as Automotive and Retail/Travel “have continued to see softness.”
While that puts a damper on the overall state of advertising for broadcast radio and television, S&P Global/Kagan finds that Pharmaceutical, Telecommunications and Professional Services continues to outperform other ad categories.
Meanwhile, the Kagan data from S&P Global confirm that National remains weaker than Local, as ad agencies and major brands are shifting budgets to digital native platforms as content shifts from linear to streaming.
The big takeaway?
Kagan’s 2024 projection 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.
THE TV PICTURE
As reported by Kagan, TV station core local and national ad revenue in 2024 is expected to remain statistically flat, slipping by 0.3% to $17.58 billion. Local spot revenue is up 1.5%, and that is offset by a decline of 4.5% in National spot. Digital “could” climb 3.0%, Kagan notes.
Then, there is the $4.09 billion in political ads in this presidential election year. As such, total TV station ad revenue is expected to grow 14.1% to $24.95 billion.
Now, the hard news for broadcast TV leaders: TV station ad revenue over the next five years is projected at a -2.1% compound annual growth rate (CAGR), hitting a high of $25.57 billion in 2028. It is then forecast by Kagan to fall 12.5% to $22.39 billion in the 2029 non-election year. “This five-year CAGR is lower than the 2023 outlook, given it starts in a presidential election and Summer Olympics year in 2024 and ends in a non-election year in 2029,” Nielson notes.
Over the 2024–2029 projection period, the core national spot ad market for TV station owners is expected to decline by 5.0% CAGR and local spot will be 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, Kagan concludes.
TUNING OUT RADIO?
The radio station industry’s five-year ad outlook, driven more by the local market and less 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, we expect declines in the national spot of 5.0% CAGR and the local spot of 3.6% CAGR, 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,” Nielson says.
