Rah Rah Radio?

04 Dec 2008 9:48 AM | Ray Seggern (Administrator)
One of our Wizard of Ads partners Joshua Stevens brought this article to my attention this morning.  It paints a bleak picture, to be sure. 

In my own experience, I had a media sales rep in a major city tell me that his station lost $1 million in billing just from mortgage/banking advertisers that went away.  Approximately 10% of their billing just disappeared.  Poof!

Of course, his sales manager (and at its core, "his" shareholders) still have their goals to hit.

This hammers home my point that there should be some terrific opportunities to get some great deals with radio stations in 2009.

And since I believe that radio remains the most powerful tool with which to build your One Man Brand...there is good news on that front.


No relief in sight as radio ad revenue declines
Wed Dec 03 22:34:40 UTC 2008
By Jeffrey Yorke and Katy Bachman

NEW YORK (Billboard) - Newly released data suggests that the U.S. radio industry could be on track to record its worst annual drop in ad revenue in decades.

According to the Radio Advertising Bureau (RAB), total ad revenue for all U.S. radio markets dropped 10 percent in October from a year earlier. Local revenue fell 15 percent, while national revenue slipped 1 percent.

October marked the industry's 18th consecutive month of year-on-year revenue declines, according to James Boyle, a senior broadcast analyst at research firm C.L. King & Associates in New York.

Given that total ad revenue is down 7 percent year to date through the end of October, the continuing decline evokes comparisons to 2001, when ad revenue was down 7 percent for the entire year, Boyle said in a November 24 research note. But, he observed, that was against a tough comparison to 2000, when revenue grew 12 percent.

"One actually has to go all the way back to 1954, when radio ad revenue was down 9 percent against the prior year's dip of 2 percent" to find a worse decline, Boyle said. "1954 was the fourth straight year of substantial radio advertising underperformance versus total domestic ad revenue."

That was also the year, Boyle quipped, "when 'The Lone Ranger' had its last new radio episode and Sen. Joseph McCarthy was railing against hidden Communists."


The future doesn't appear bright, Boyle said. "If the recession lasts for all of 2009 and the weakness persists in many of the major radio ad categories, such as auto, to the point where spending severely plunges, then it may be 2010 or beyond before radio revives," he said.

The dismal October numbers came on the heels of the RAB's release of more detailed data on ad revenue in the third quarter. Despite the benefit of political advertising leading up to the November 4 U.S. election, ad revenue in the three months ended September 30 totaled $4.9 billion, down 9 percent from the same period of 2007. Year to date, total revenue stood at $14.8 billion, down 7 percent from a year earlier.

Local and national on-air revenue dropped 11 percent to $4.2 billion in the quarter. Even network radio, a segment that has defied the rest of the business by managing to grow during the first half of the year, was down 3 percent to $285 million. Off-air revenue, including online advertising, rose in the quarter but managed to grow just 5 percent to $458 million, slowing from the double-digit percentage gains posted in the first two quarters of 2008.

There was little good news for radio's core on-air business with local advertising, which accounts for about 80 percent, falling 10 percent in the third quarter to $3.5 billion. National spot advertising remained the weakest segment, down 12 percent to $767 million.

Amid the recent financial market turmoil, concerns about a deepening recession and a slowdown in consumer spending, the outlook for all local media, including radio, looks tough, according to Marci Ryvicker, a senior analyst at Wachovia Capital Markets in New York.

"Our sources tell us that spending from all major ad categories -- auto, retail, telecom and financial services -- has come to a substantial slowdown,'' Ryvicker noted in a November 24 report.

As a result, she now expects U.S. radio ad revenue to fall 8 percent in 2008 and 2009, compared with a 2 percent decline in 2007.
Your Privacy is Guaranteed. We will never give, lease or sell your personal information. Period!  |  © 2008 Ray Seggern
Powered by Wild Apricot. Try our all-in-one platform for easy membership management