A familiar narrative has emerged among radio companies reporting their first-quarter earnings this month: Political advertising revenue is lagging for some, but the cash floodgates are — hopefully — expected to burst wide open as the 2024 calendar inches closer to November.
Broadcasters have reasons to be optimistic: First and foremost, there’s no doubt that a lackluster presidential primary has weighed on first-quarter results.
Second, the U.S. Senate, where the most spending has occurred thus far, and the House of Representatives are both divided by razor-thin margins, making every single election, as pundits frequently observe, “one that could determine control of the chamber.”
From a primary perspective, President Joe Biden has faced virtually no opposition on the Democratic side of the aisle, and while several Republicans initially threw their hats in the ring hoping to deny former President Trump a second nomination, their resistance was relatively brief. Trump’s last and most prominent opponent, former United Nations Ambassador Nikki Haley, ended her campaign in early March.
According to a forecast by eMarketer, U.S. political ad spending will top $12 billion this year. That would represent a new high and would almost triple the $4.25 billion spent in 2016.
For iHeartMedia, the political news so far in 2024 has been good. On the company’s latest earnings call, President, COO and CFO Rich Bressler predicted “robust political advertising.” He said political ad sales are currently 16% higher than in the last presidential election year, when iHeart booked $167 million in political ad sales.
Beasley Broadcast Group, which reported Q1 earnings this week, said it generated $548,000 of net political revenue in the first quarter vs. just $19,000 a year ago. But Beasley also said it expects “robust” spending this year and is poised to benefit with several of its markets located in swing states, including Florida and Pennsylvania.
One of the most unique states for ad spending for the rest of 2024 will be in Montana, where a hotly contested Senate race between incumbent Sen. Jon Tester (D) and GOP challenger Tim Sheehy, a former Navy Seal, is shaping up to mean big bucks for media owners in the state.
That’s a potential windfall for Townsquare Media, which has nearly three-dozen radio stations in the state, in Billings, Bozeman, Butte, Great Falls, Missoula and Shelby — all of which, in keeping with the company’s strategy, live outside of the top 50 U.S. markets.
“There are concerns about whether there’s enough inventory in the state to handle the massive amounts of spending that’s going to happen,” Steve Passwaiter, President of Washington, D.C.-based Silver Oak Political, wrote earlier this month in Ad Age. “Rumors of media buyers reaching out to media sellers to capture more inventory in the final months of the campaign are rampant. It’s a foregone conclusion that this will be the most expensive election race in the history of Montana.”
Cumulus Media, which owns or operates more than 400 stations across the U.S. in markets big and small, said on its Q1 call that political revenue was $2.2 million, down 55% from 2020 — in what was a substantially more competitive primary season.
It also has dozens of stations in key places across the U.S. political landscape: Michigan, Arizona, Florida, Nevada, North Carolina and Pennsylvania, among others.
Saga Communications CFO Sam Bush, speaking last week on Saga’s Q1 call said that political’s impact was small in the latest quarter.
“For the quarter, we had $312,000 in gross political revenue this year, compared to $194,000 for the same period last year,” he said. “Political has been slower than expected so far this year. We expect it to pick up as the year progresses, but it’s still difficult to determine where the hot races will be, and how they will impact the states and markets we are in.”
PQ Media has forecast a record $14.6 billion in political ad spending, up 44.4% from 2020’s $10.1 billion. PQ predicts radio’s take of that will $769 million, a 5.3% share of the total and representing a 35% growth rate — well above its 27% growth estimate for overall marketing media.
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