With iHeartMedia posting its biggest increase in earnings during the fourth quarter in three years, Chairman and CEO Bob Pittman had an optimistic message for analysts Thursday. He said not only will digital—especially podcasting—continue to lead iHeart’s revenue gains this year, but the company is also preparing to jump into programmatic sales in an even bigger way. That should help as he sees some uneasiness about the coming year among some ad buyers.
Fourth Quarter And 2024 Show Growth
Revenue totaled $1.1 billion as political revenue pushed iHeart to a 4.8% increase in revenue during the fourth quarter compared to a year earlier. Without it, revenue would have been down 1.8% year-to-year. Earnings totaled $105 million. For all of last year, revenue totaled $3.9 billion, up 3% from 2023—although it would have been flat without the influx of political advertising.
The Multiplatform Group, which includes the broadcast radio and events business, saw revenue hold steady at $684 million during Q4. “We saw a slowdown in non-political advertising revenue just before the presidential election, which, we had hoped would be re-expressed after the election. In the end, it was not,” President/COO/CFO Rich Bressler said.
But Pittman told analysts he thinks radio will continue to be a “growth engine” for iHeart. “Broadcast radio is the undisputed leader in monthly audience reach—and as we look at our advertising growth opportunities for broadcast radio, the most important variable for advertising on any medium is what's happening to the audience,” he said. “On that front, broadcast radio is not only healthy, but robust.” Research showing how well radio works when combined with other media, as well as ad tech innovations, makes Pittman more confident in its future.
Programmatic To Play Bigger Role
As more advertisers look to buy advertising through programmatic exchanges, iHeart is taking steps to ramp up its availability where that business is being transacted. “It's a growing part of the ad market,” Pittman said, telling investors that he believes the computers that make buying decisions will not have the anti-radio bias of some buyers, and that should work in their favor. “When the algorithm looks at the facts and makes choices about allocations, that can be very beneficial to broadcast radio,” he said.
To grab a share, iHeart’s broadcast radio inventory will begin to be available in the Yahoo DSP and Google Display & Video 360 exchanges beginning next month. Pittman said will put iHeart radio avails alongside other programmatic assets like CTV. “This is a critical early step in aligning our broadcast assets with digital buying behavior,” he said.
Bressler said iHeart has also lined up some potential real-time bidding sales options, telling analysts that 2025 will likely be more focused on rolling out its programmatic options with a bigger impact on revenue coming in the years to come.
Digital Keeps Expanding
Even as radio is holding its own, digital is where iHeart’s fastest rate of revenue gains continues to be. The Digital Audio Group posted a 7% increase in overall revenue during Q4 compared to the prior year, with total revenue of $339 million. And for the whole of last year, it was up 9% to $1.2 billion. Pittman said they have seen a “strong positive response” from listeners to the updated iHeartRadio app that was released in December. It brings the ease and simplicity of the traditional car radio experience to audio streaming.
Podcasting Grows Double-Digits
Digital may be growing overall, but podcasting is leading the charge. iHeartMedia reports total podcast revenue of $140 million during Q4, an increase of 6% versus a year earlier. And podcast revenue jumped 10% for all of 2024, increasing to $448.8 million. Without podcasting, digital revenue’s 9% growth rate last year would have been a point lower. The company expects podcasting to increase even more in the first quarter, with business currently pacing up in the high-teens. Pittman said iHeart has the most profitable podcasting business in the U.S. thanks to their financial discipline.
“The drivers of podcasting are all of them,” said Pittman, explaining, “We're in that fortunate phase in podcasting, in which everything's growing.”
Pittman said iHeart is also continuing to explore adding video to some podcasts, but the focus will be on shows that they can recoup the investment and whether there is a sizable enough demand among its listeners. “Given we're the number one podcast publisher, we've got the biggest stable to play with and there's a lot we can do there,” he said. Yet Pittman also pointed to research that shows only 10% of podcast listeners prefer video, with many simply listening to the audio tracks.
Uncertainty Emerges In 2025 Marketplace
The new year has brought economic uncertainty among some advertisers, as they worry about the impact of threatened tariffs and the potential for higher inflation and interest rates. Bressler noted consumer confidence has also ticked lower. The result is billings that increased 5.5% during January, swung to a decrease of 7% in February.
“People are taking a little bit of a step back,” said Pittman. “If there's ever a quarter in which advertisers feel confident and comfortable stepping back a little bit, it's first quarter.”
Bressler said Q1 revenue will also be impacted by the Los Angeles wildfires. Not only is L.A. the company’s top-billing market, but its direct client sales team is also based there and the wildfires disrupted their sales.
Compounded by the fact that it is the lightest quarter for revenue, iHeart is projecting overall first quarter revenue will be down low-single digits compared to the prior year. Bressler said the digital business is on track to grow, however, with podcasting revenues expected to increase in the high teens, while the broadcast business is tracking down in the mid-single digits.