Cumulus benefited from the acceleration of political spending and improving national trends in the quarter. However, President/CEO Mary Berner said there remains a fair amount of hesitation on the part of marketers, who want to see how the economy settles after the election.
“Many advertisers continue to cite the overall rate environment and concerns around the upcoming presidential election as impediments to their spending,” Berner told analysts during a Friday morning conference call. “That said, we remain focused on key areas of the business that are in our control, including investing in digital growth, optimizing political spend, capitalizing on areas of improvement in national advertising, driving additional cost efficiencies, and delivering operating cash flow.”
As previously reported by Inside Radio, Cumulus Media reported revenue of $204 million in Q3 2024, down 1.8%, but still in line with pacing guidance. Broadcast radio revenue was $1.38 million, up 5.5% from a year ago. $96 million was from spot revenue, and $43 million was identified as network revenue.
Among the positive indicators Cumulus is seeing in its national ad businesses is the growing demand for live sports products, which contributed 5% revenue growth to its network business in the quarter. Westwood One’s exclusive audio partnership with the NFL and its coverage of the Paris Olympics helped boost billings. “We’ve also found success utilizing sports as a compelling re-entry point for clients who have been out of network radio for a while or to boost spending with clients who had decreased spending from prior-year levels,” Berner explained.
Digital revenue for the quarter was $40 million, an increase of 7.5% year-over-year. Much of the Q3 digital growth came from the company’s Digital Marketing Services division, where billings shot up 38% year over year after racking up 24% growth in the first half and 4% in the third quarter of 2023. “Our DMS business is flying on all cylinders, as is reflected in several key performance indicators,” Berner boasted. For example, customer count grew by 22%, customer retention improved by 6%, and average digital order size per customer increased by 17% during the quarter, Berner said. Additionally, the number of legacy radio clients who now also buy DMS products from Cumulus is up 32%.
Streaming revenue increased only slightly during the quarter. Cumulus is hamstrung in the streaming space by what Berner called a “difficult comp caused by the expiration of a fixed-rate sales contract last year.”
Berner said political spending was impacted by the change in the Democratic presidential candidate, “which reduced spending on both sides as the transition from Biden to Harris was completed,” she said. “Though a majority of our political revenue comes from down-ballot races, the temporary pause in presidential advertising spending resulted in lower than expected political in the quarter.” Berner said political advertising “has significantly rebounded in the fourth quarter… to date, political revenue booked of approximately $9.7 million, up from $8.3 million in q4, 2022 but down from $14.3 million in Q4 2020 which benefited from two Senate races and subsequent runoffs in Georgia.”