During the pandemic and ensuing lockdowns, fewer people commuted to work every day, and many local businesses cut their marketing budgets as they fought to stay open. These conditions have strained the radio advertising market.
In our March 2020 forecast, US radio ad spending was expected to decline just 1.0%. We now anticipate a 25.0% drop. Ad spending declines in traditional channels are part of a long-standing trend, but the pandemic further deepened the decrease in radio ad spending.
We expect radio ad spending to partially rebound next year, rising 16.8% to $12.18 billion. But that will be the high point for radio ad spending. Spending will incrementally decline after that and never reach pre-pandemic highs again. Our forecast includes terrestrial AM/FM radio and satellite radio, local and national broadcast of traditional on-air radio stations, and satellite radio services that are delivered over the air. It excludes digital audio.