The advertising market for radio is performing better than many pundits expected.
HT&E’s ARN radio revenue surged 53% to $344.9 million in the year to December, boosted by a full 12 months benefit from the acquisition of Grant Broadcasters and its 46 regional stations which the company says has proven to be an “outstanding investment”.
But net profit after tax was a negative $176.3 million, compared to a positive $14.9 million the previous year, due to a non-cash impairment of $249.9 million reflecting “uncertainty associated with the current macro-economic” environment.
CEO Ciaran Davis told AdNews: “Over the last six or eight months, the stock market has built into their pricing of media assets a global downturn and that impact on consumer sentiment coupled with interest rate rises, inflationary pressures.
“And the view is that that advertising will be the one of the first categories to fall away. Media stocks pricing has come under pressure and we're down about 40%, which is in line with the rest of the media companies.
“It's attributable to the intangible assets on the balance sheet, and it's reflective of the full ARN business not pinpointed against regional or against metro. It's the full ARN valuation.”
At the start of 2023, the company is pacing to flat compared to a strong first quarter last year but business is picking up..
“The briefing activity is very strong for March and Q2,” Davis says.
“There's a couple of categories that are not spending yet … we do believe that's a timing issue.
“Retail has been okay … it hasn't been as strong as it has been but it's still performing pretty well. Motor is coming back and the bigger categories of advertised radio are doing well.
“The federal government has yet to spend but we believe that the time you think there may be there may be a referendum coming, who knows. But we think that's a timing thing.
“Overall, you know, we're pleased with where radio sits and certainly the investor market probably didn't anticipate as strong an advertising market that we have today across the board.
“But I think it just goes to show that there are brands and advertisers and businesses out there that have a really tough two or three years with COVID and despite the uncertainty some of them have just said, ‘We've got to spend, we've got to build a brand, we've got to communicate with our customers and sell our product’.
“And radio in these times is a very strong medium for advertisers because of its immediacy, its cost effectiveness and, and more importantly, the engaged audiences that we have and the attentive audience that we have delivers a very strong ROI.”
In 2022, Metro radio was up 3% and regional radio 7% with "solid" local revenue growth across most of network
The focus this year is on driving national regional revenue synergies.
2022 Metro, Regional, Digital:
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.