Radio advertising is expected to pick up this financial year and next, according to anaylsts at Macquarie Bank.
"We see Australian Radio sector as providing a relatively defensive exposure in difficult market conditions for traditional media," write the analysts in a note to clients.
They forecast 1% growth this year, following a weak June quarter, and 2% in 2021.
Advertising revenue for metropolitan commercial radio stations totalled $209.223 million in the June quarter 2019, according to data compiled by Deloitte and released by industry body Commercial Radio Australia.
The figure reflects a 1.7% decline from the same quarter a year ago.
The Macquarie analysts say the second half resulted in generally weak advertising markets as broader macro uncertainty and the absence of election related spend impacted radio, with no material pick-up in radio ad spend following the federal election in May.
"Looking forward, sentiment is expected to improve into FY20 underpinned by financial sector spend (both Insurance and Banks), and as such we have assumed a rebound to +1.0% market growth in FY20," say the analysts.
Commercial Radio Australia chief executive officer Joan Warner says radio has been relatively resilient, but advertising market conditions remain challenging for all media businesses.
“The market needs a kick start," she says.
"We’re hopeful that income tax cuts and lower interest rates will flow through the economy and encourage advertisers to start spending again in the months ahead.”
The June quarter figures showed mixed results across the five major capital cities.
Advertising revenue rose in Melbourne (+2.03% to $68.187 million), Brisbane (+0.60% to $32.786 million) and Adelaide (+1.35% to $18.717 million), but fell in Sydney (-5.60% to $63.161 million) and Perth (-5.96% to $26.371 million).
For the 2018-19 financial year, metro radio ad revenue totalled $800.779 million.
The Deloitte figures report actual revenue received by metropolitan commercial radio stations and include all agency and direct revenue.
Macquarie's forecasts:
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