Despite record numbers in listenership around the world, the radio industry is set to face a number of challenges as we enter a new phase of economic hardship around the world. The pandemic has proven radio to be the most reliable source of information and an effective medium for community building during difficult times. However, listener statistics aside, the industry is dictated by the global economy, along with every other industry. No industry is immune to the changes since the world B.C. (Before Corona) and while radio continues to be a focus for many, challenges are on the horizon.
In the United Kingdom, Business Insider writes that the total media ad spending will be £21.03 billion ($26.84 billion), down 7.5% from 2019. This steep decline in expenditures can be attributed to the lack of spending on traditional media.
After making very significant downward revisions across traditional media channels due to the effects of COVID-19, we expect traditional media ad spending to fall 22.6% in 2020. This estimate is based upon the assumption that the UK will not experience a significant second wave of infections.
As a result of the coronavirus, out-of-home advertising was the most negatively affected medium, with growth revised down from our previous forecast by 26.3 percentage points. That was followed closely by radio, revised down by 22.0 percentage points. (Source: Business Insider)
In Australia, radio spending has plummeted by -55.8% according to the Standard Media Index. The impact of the pandemic has been felt by the economy in Australia, showing a record decline in national marketer ad spend of 40.4% to $345.6 million. That represents a year-on-year decline in corporate advertising expenditure of $234 million and puts the Australian market on track to see more than $700 million wiped from the advertising market in just the April to June period. (Source: RadioInfo)
Standard Media Index AU/NZ Managing Director Jane Ratcliffe says that “SMI has just published our first Canadian ad spend data, and that showed a year-on-year decline in ad spend of 50.1% in May while in the UK the fall was 41.6%, 38% in NZ and 32% in the US. The sad reality is that all sophisticated media markets are feeling the full impact of the COVID pandemic and it’s devastating everywhere.’’
Moreover, according to an AdEx report, advertising on radio fell by 82% in India between March and May 2020. In addition to this cute, was a reduction in Government ads, which was one of the biggest contributors to radio. As listenership provides a solid base for recovery, there is still a long way to go.
M V Shreyams Kumar, Managing Director, Mathrubhumi Printing & Publishing stated that “Radio ad revenue has suffered significantly amid the global pandemic; major advertising revenue sectors such as MSMEs (micro, small and medium enterprises), real estate, hospitality and retail sectors have been hit hard.” (Source: BestMediaInfo) However, Abraham Thomas, stated that despite the cut in advertising over the lockdown period, “we are already on the path to recovery. ”
More generally speaking, advertising spend is down 14% in Japan and Spain, 13% in France and 15% in Italy.
It is evident that the industry will face a number of challenges as a result of the economic impacts felt by COVID-19. Ironically, the industry has received record listening numbers over this period, despite the cut in advertising. This is evidence of the industry’s integrity and the silver lining in what is a challenging time globally.