Major players in the radio advertising market are Sirius XM Radio Inc., iHeartMedia Inc., Entercom Communications Corp., Cumulus Media Inc., National Public Radio Inc., Strategic Media Inc., The Radio Agency, Jacob Tyler, Sid Lee and Citizen Group.
The global radio advertising market is expected to decline from $19.6 billion in 2019 to $19 billion in 2020 at a compound annual growth rate (CAGR) of -3.07%. The decline is mainly due to the COVID-19 outbreak that has led to restrictive containment measures involving social distancing, remote working, and the closure of industries and other commercial activities resulting in operational challenges. The market is then expected to recover and reach $20.5 billion in 2023 at a CAGR of 2.55%.
The radio advertising market consists of the sales of advertising services and related goods by entities (organizations, sole traders and partnerships) that plan, develop, create and manage advertisement and promotional activities on the radio. Only goods and services traded between entities or sold to end consumers are included.
North America was the largest region in the radio advertising market in 2019. Asia-Pacific is expected to be the fastest-growing region in the forecast period.
In February 2019, iHeartMedia, an American mass media corporation, announced its acquisition with Radiojar Information Technology S.A for an undisclosed amount. With the acquisition of Radiojar Information Technology S.A, iHeartMedia plans to leverage Radiojar’s tools to coherently associate with the seamless elements of broadcast radio and transition these skillfully produced listening experiences into any audio platforms including music streaming and podcasts, delivering high-quality audio experiences more effectively and efficiently. Radiojar Information Technology S.A is a company that provides online radio management and streaming solutions.
The radio advertising market covered in this report is segmented by type into traditional radio advertising; terrestrial radio broadcast advertising; terrestrial radio online advertising; satellite radio advertising and by industry application into BFSI; consumer goods and retail; government and public sector; IT and telecom; healthcare; media and entertainment.
A decrease in radio ad spending is likely to limit the growth of the radio advertising market. A decline in ad spending on traditional channels is part of a long-standing trend. The companies are investigating alternative business models and evaluating innovative emerging technologies such as online fixed programmatic display and mobile video that provide consumers with instant access to the content. However, the pandemic has caused a significant decline in radio ad spending by several industries due to social distancing, containment restrictions, and closure of industries and other social activities. According to the Radio Today radio station, Australia, the spending on radio ads declined by 32.8% in August 2020 compared to the same period in 2019. The radio ad spending has declined disproportionately in recent months due to advertisers cutting their overall media budgets, which is likely to hinder the market growth.
The launch of digital radio is gaining popularity in the radio advertising market. Digital radio gives users greater spectral efficiency. For instance, Radio in the UK passed a significant milestone on 17 May 2018. It was found that, for the first time, more than half of Britons have radio access digitally. In 2018, according to Radio Joint Audience Research (RAJAR), the figures for digital radio have risen by 50.9% in the first three months of 2018 compared to the previous year. Moreover, if digital modulation methods that require more complex transmitters and receivers are used, more information could be transmitted in comparison to traditional analog modulation schemes.
Cost-effective routes of advertisement for big and small companies are expected to drive the demand for the radio advertising market. Although newer advertising platforms such as the internet and other digital media are gaining traction in the advertising market, radio still represents a powerful advertising medium due to its high cost-effectiveness. For smaller markets, companies spend about $900 a week for a 30-second ad schedule and around $8,000 a week in bigger markets such as Sydney. On average, companies pay around $20 to reach 1,000 listeners during peak times of the day and close to $10 or $15 during off-peak hours. Therefore, the cost-effective routes of advertisement are predicted to fuel the demand for the radio advertising market.
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