S&P Global: U.S. Radio Industry Sees Podcast Growth Amid Declining Ad Revenue
The U.S. radio industry is undergoing a major transformation, shifting away from traditional advertising revenue toward digital growth opportunities. While national and local spot ad revenues are either flat or declining, platforms such as podcasting, streaming, and connected device integration are driving a new wave of revenue growth for broadcasters.
Despite a challenging environment, radio continues to maintain unique advantages in the media landscape. According to Justin Nielson, Head of Kagan Research at S&P Global, radio’s core strengths include:
Lower advertising costs compared to TV and online platforms
Strong local audience engagement
High return on investment (ROI) for advertisers
However, the spot advertising market — both national and local — faces ongoing pressures. Unlike TV, radio has a smaller share of political advertising, making it heavily reliant on core commercial categories.
Top-performing ad categories include:
Investment and retirement services
Quick-service restaurants
Supermarkets and grocery chains
Commercial banking
Hospitals and healthcare providers
Meanwhile, traditional auto advertising is challenged by high interest rates, though service and parts promotions remain a consistent revenue source.
Declining Spot Advertising Revenue
S&P Global projects that national spot advertising revenue will continue to decline over the next decade:
2025: $1.76 billion (down 5% from previous year)
2026: $1.7 billion (down 3.5%)
2030: $1.48 billion (stabilized)
Similarly, local spot advertising revenue is expected to contract before modest recovery:
2025: $7.66 billion (down 4%)
2030: $7.17 billion (slight recovery after smaller annual declines)
These trends highlight the urgency for radio station owners to diversify revenue streams beyond traditional advertising.
Digital Platforms Driving Growth
To counter declining ad revenue, radio companies are increasingly investing in digital and streaming platforms. Key growth areas include:
Podcasting — Expected to surpass $1 billion in ad revenue in 2025, with a 22% growth rate, driven by personality-driven shows
Streaming and connected devices — Offering new opportunities for audience engagement and monetization
Digital marketing services — Helping local businesses reach niche audiences
Projected digital revenue growth:
2025: $1.75 billion (6.5% increase)
2030: $2.31 billion
Off-air revenue, such as live events and branded experiences, is also poised for growth, expected to reach $2.78 billion by 2030.
The Power of Personality-Driven Content
Even in an age of streaming platforms and satellite radio, traditional radio retains an enduring appeal due to:
Local reach and trust
Engaging on-air personalities
Integrated digital experiences
As music becomes more commoditized, the role of radio personalities is crucial. They not only drive audience engagement but also attract advertising dollars, providing a competitive edge in a fragmented audio market.
Strategic Shifts in the Radio Industry
Some radio groups are pivoting from cost-cutting measures to strategic investments in:
New talent acquisition
Innovative programming formats
Podcast development and monetization
Yet, the industry faces ongoing challenges:
Low entry barriers for digital personalities — increasing competition for listener attention
Market fragmentation — audiences are spread across multiple platforms
Ad spend competition — social media and streaming services continue to attract advertiser budgets
Despite these challenges, radio’s local relevance, trusted voice, and digital integration continue to make it an attractive platform for advertisers.
Podcasting: The New Growth Engine
Podcasting has become the fastest-growing segment in the radio industry, fueled by:
Niche content for targeted audiences
On-demand listening habits
Personality-driven shows with strong engagement
S&P Global’s Kagan Research projects that podcast ad revenue will exceed $1 billion in 2025, a 22% increase year-over-year, signaling a major revenue opportunity for radio broadcasters investing in digital transformation.
Conclusion: Radio in 2025 and Beyond
The U.S. radio industry is evolving, not dying. While traditional spot advertising declines, digital expansion in podcasts, streaming, and off-air initiatives offers sustainable growth opportunities.
For advertisers, radio remains an effective platform with high ROI, local reach, and trusted personalities. For broadcasters, investing in digital content, talent, and podcasts is no longer optional — it’s critical for long-term survival in an increasingly competitive audio landscape.
