With rising competition from digital avenues, especially podcasting, along with dried up core ad revenue spend, our updated analysis on the three largest radio networks indicates the average unit ad rates per 30-second spot is expected to decline 18.2% in 2020 compared to 2019.
This study is conducted on annual basis to gauge the performance of ad rates commanded by major U.S. radio networks. Data is collected from numerous program format clocks and is analyzed in conjunction with our view of advertising trends within the radio broadcast sector. The publication includes historical average ad rates, and, how they are trending each year.
After the radio sector registered a weak ad revenue trend during the past few years, the COVID-19 lockdown exacerbated the ad revenue environment. Circumstances related to the pandemic-induced recession are forcing radio station and network owners to reduce operating costs and increase digital initiatives to conform to changing consumer listenership trends.
Our methodology for average unit ad rates across the three major radio networks includes our estimated spot-ad revenues for the industry and average length of local and network ad spots on an hourly basis coupled with our assumptions for average sellable programming hours per station and the ad sell-out ratio. Estimated ad rates for 2020 are based on data collected from format clocks on the respective websites for the three major U.S. radio networks as of Sept. 15 and our most recent radio ad revenue projections for the year.
Syndicated news/talk shows and programmed music formats commanded an average of 16.7 minutes of ad time per hour in 2020 for content from Cumulus Media's Westwood One, iHeartMedia Inc.'s Premiere Networks and Salem Media Group Inc.'s Salem Radio Network. The three groups averaged a lower 16.6 minutes of ad time per hour in 2019. News/talk shows drew an estimated average of 18.5 minutes of commercial airtime per hour, compared to 14.4 minutes for shows in the music genre.
Average ad rates for major US radio networks declining in 2020