Where Radio Shines

With all the talk about advertising budgets being cut and big corporate media losing money or having to lower their budgets, there are several areas that my primary media (radio) is making money.

Take a look:

Monday, September 8, 2008

Radio's Off-Air Revenue Surpasses Forecast

Off-Air revenue (previously referred to as Non-Spot) has surpassed last year's mid-year forecast by the Radio Advertising Bureau (RAB) , and is expected to approach $2B by the end of 2008 - nearly a full year ahead of the predicted timeline. Exceeding expectations that were based on a compounded annual growth rate of 10% from June, 2005 to June, 2007, Off-Air activity surged in late 2007 and has been increasing at a CAGR of 12.3% over the past two years. The sector outperformed the projection and is on the fast track to pass $2B in 2009.

Jeff Haley, President and Chief Executive Officer of RAB, says "... The industry's investment in new technology and digital distribution channels has extended Radio to the Internet, mobile phones, navigation systems, and more... the result is a 360-degree experience for consumers... with multiple touch point opportunities for advertisers."

At 9% of Radio's total revenue, Off-Air is comprised primarily of online activity, followed closely by experiential marketing partnerships.

Revenue Comparisons (2008 vs. 2007 In Millions of Dollars)
Revenue	$Q2 '08	% Chg	$1st Half '08	% Chg
Local	$3,792	-7%	$6,978	-6%
National	$778	-11%	$1,428	-11%
Local & National Combined	$ 4,570	-8%	$8,406	-7%
Network	$293	0%	$567	3%
Off-Air	$501	10%	$889	12%
Grand Total	$5,364	-6%	$9,862	-5%
Source: Miller, Kaplan, Arase & Co., August 2008

In the Local and National sectors, Radio's Q2 and year-to-date revenue revealed a number of well-performing areas even as total media spending cutbacks in key categories impacted Radio's bottom line.

On a year-to-date basis, Political advertisers who elected to use Radio contributed a welcome infusion of dollars. Insurance advertisers increased spending by an impressive 21.6%. Professional Services spending grew significantly, up 18.3%. The Department/Discount Stores/Shopping Centers added more Radio, up 10.2%, while the Beverage category added a 7.6% increase.

Radio's Combined Local and National Leading Growth Categories (2008 vs. 2007)
Category	Q2 '08 (millions)	Q2 '07 (millions)	% Change	1st Half '08 (millions)	1st Half '07 (millions)	% Change
Insurance Companies	$231.8	$198.4	17%	$421.8	$346.8	22%
Dept/Disc. Stores/Shop. Ctrs.	$159.0	$142.4	12%	$283.2	$256.9	10%
Professional Services	$84.6	$76.2	10%	$264.6	$223.6	18%
Source: Miller, Kaplan, Arase & Co.:X-Ray Markets

Traditional top-spending industries hard hit by the economy include Automotive, Financial Services, Home Furnishings/Floor Coverings, and Home Improvement Stores. The Communications/Cellular/ Utilities sector has been slowed down by market saturation (90%+ penetration), and customers not as willing to trade up to new equipment.

Local, National, and Off-Air revenues are based on a pool of more than 100 markets

For the complete PDF report including category details, please visit the RAB here.

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