“The mobile sector, with its huge amount of data and the growing public, is sucking up the entire advertising industry . ”
This is Davis Hebert, an analyst with the US financial services multinational Wells Fargo, during his presentation at Pillsbury Broadcast Finance breakfast at The Radio Show 2018 (an event held in Orlando last week, which has been investigating issues related to the financial status of radio industry and in which industry leaders and financial experts participate).
In the debate on economic data related to the trend of radio reported by a Radio Ink article of 09/27/2018, Hebert has launched a clear message: despite the economy is booming, the radio is receding. The heavy debt collected by the two largest owners of US radio groups , iHeart Radio ( now back in line with the financial crisis that went through it ) and Cumulus, which would have dampened the interest of investors in all the radio sector.
The result is that the digital market, driven by the mobile sector, is taking share and is destined to become the first global media category thanks mainly to the use of Search, Social and Video by users, whose consumption is moving towards the digital world.
In this scenario, according to Hebert, this year the sale of advertising space on the web (and especially mobile advertising ) is expected to increase by almost 40% and the biggest beneficiaries of these revenues will be the two global media dealerships dominating Search and Social, that is Google and Facebook; with regard to radio, on the other hand, a decrease of 2% is expected.
Despite this, a rise for the radio sector should come from the next US election campaign: Magna Global , intelligence division of IPG Mediabrands, would have predicted this political event at 2.9 billion dollars.”Most of these revenues will go to local TV, but the radio could get 5-7% of this revenue,” says Hebert.
For the radio, this could be an opportunity for regrowth, given the difficult period that is going through. “2018 is an important transition year for the radio industry,” says Wells Fargo, an analyst who identifies four rapidly expanding sectors in the world market where radio could invest to win back the public and establish itself as the main medium for audio listening: mobile streaming , podcasting , smart speakers and big data.