Salem Media Group saw a decline in revenue during the first quarter of 2024, with the company believing that advertisers are questioning the “effectiveness” of radio.

The company saw a net revenue of $58.6 million in the quarter, a drop of 8.3%. Broadcast revenue fell to $46 million, down 4.6%. Digital revenue, however, was on the rise, up to $10.7 million. That is an increase of 1.9%.

“Revenue growth from the sale of broadcast airtime is negatively impacted by audiences spending less time commuting, certain automobile manufacturers removing AM radio signals, increases in other forms of content distribution, and decreases in the length of time spent listening to broadcast radio as compared to audio streaming services, podcasts, and satellite radio,” the company claimed. “These factors may lead advertisers to conclude that the effectiveness of radio has diminished.”

The drop in broadcast revenue can be attributed to a decline in local advertising, as the company dropped $1.1 million in the category. Salem Media Group shared that it is still heavily reliant on its stations in Los Angeles and Dallas for large portions of its local ad revenue.

“Our broadcast advertising revenue is particularly dependent on advertising from our Los Angeles and Dallas markets, which generated 15.3% and 18.4%, respectively, of our total net broadcast advertising revenue during the three-month period ended March 31, 2023, compared to 15.1% and 18.7%, respectively, of our total net broadcast advertising revenue during the three- month period ended March 31, 2024.”

Revenue from its nationally syndicated programs fell $800,000 in the first quarter when political advertising wasn’t factored in. The company did see an increase of $400,000 in that particular advertising category.

As more and more radio broadcasters reveal their first-quarter revenue results, Audacy is one of the few reporting a gain during the first three months of 2024.

Revenue for the company reached $268.1 million, up 1% compared to the $259.6 million it saw during the first quarter of 2023.

While radio advertising revenue dropped 2%, digital revenue rose 10% to make up the difference. The company made significant decreases in its operating losses. In the first quarter, Audacy lost $400,000, compared to $12.2 million during the same time period last year.

“The Audacy team is very much looking forward to a bright future, emerging as a scaled leader in the dynamic audio market, distinguished by our best-in-class balance sheet, our top positions across the country’s largest markets, and our exclusive premium content highlighted by our unrivaled leadership in sports audio,” said Audacy Chairman, President, and CEO David Field.

The company’s Adjusted EBITDA was $9.6 million for the quarter, seeing year-over-year growth of 173% compared to the $3.5 million figure it featured last year.

“We expect another quarter of substantial EBITDA growth, enhanced by our continuing work on expense reductions,” revealed Field.

While podcast revenue growth slowed in 2023, a new Interactive Advertising Bureau (IAB) study says it will return to form in 2024 with big gains.

Last year, overall podcast advertising revenue slowed to an increase of 5% to $1.9 billion after consecutive years of double-digit growth. However, that number will return to its double-digit success for the next three years according to the projections from the IAB.

Revenue is forecasted to reach over $2 billion this year, up 12% overall. The sector is projected to reach $2.6 billion by 2026.

“While a few of the largest podcast companies maintained double-digit growth, mid-tier companies hit a speed bump,” said IAB Vice President of Industry Insights and Content Strategy Chris Bruderle. “But revenue is already bouncing back.”

Consumer goods and retail brands saw their advertising buys grow to 4% and 5% respectively since 2022.