Major radio broadcasters, cutting costs where they can, are throwing sales resources at a tough advertising market, according to the latest trading updates.
Radio advertising, as defined by media agency bookings, was down more than 8% in March, according to SMI (Standard media Index) numbers.
Metro ad revenue for radio is down 5.8% to $146.754 million in the first quarter of 2024 compared to the same three months last year, according to industry body Commercial Radio & Audio (CRA).
“It remains a very short market, but our sales teams are aggressively pursuing every last dollar and we are trading smartly from a yield perspective,” ARN Media CEO Ciaran Davis told the broadcaster's AGM.
Investment analysts have marked down advertising dollar growth in radio.
Analysts at Evans and Partners see moderating revenue growth trends into May and June.
They have cut radio revenue growth estimates by 1% for the current financial year to 1.3%.
“The market is tough but our revenues to the end of April were ahead of last year, we are maintaining tight cost control across our whole business and are on track to deliver the cost out program identified,” said Davis at ARN.
“We are working hard to realise the organic growth opportunities in our core business and we are actively working on strategic plans to create value for our shareholders across what we believe will be a consolidating sector.”
He said April revenues were up 1% driven and digital audio up 40% on last year.
“We maintain a tight discipline on cost control and are on track to deliver the $6.5 million permanent cost-out program we committed to in February,” he said.
Competitor SCA in February said it was tightening costs with revenue and profit under pressure from a "challenging" advertising market.
The company reported revenue down 2.9% to $252.6 million for the half year to December and net profit after tax at $4.4 million, a drop of 71.1%.
However, SCA expects its digital business to turn a profit by the end of the financial year in June.
And at the same time, the broadcaster has pulled a bigger than expected lump of costs, $30 million instead of the forecast $15 million, out of the company.
In its latest trading update, SCA reported both radio and television advertising sales dipping in the four months to April.
The broadcaster told the ASX that audio outperformed with revenues up 2% over the four months to April compared to the same period last year.
Digital audio continued to grow, led by LiSTNR, with gross revenue growth of 56%, substantially above the overall market.
LiSTNR delivered positive EBITDA (earnings before interest, taxes, depreciation, and amortisation) for the first time in April and is on track to be profitable for the June quarter.
Radio advertising revenues fell by 2% but SCA’s metro market share improved, given the comparable decline of 4% in the metro radio advertising market.
SCA’s regional television business has continued to decline, with year to date revenue down 10%.
May and June total group advertising bookings are pacing slightly ahead of the last year.
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