Radio revenue rallied a smidgeon in Q309, falling only 16% this year compared with a more precipitous 25% drop in Q308, according to the latest figures from the Radio Advertising Bureau (RAB).? Year-to-date, radio revenue is down 23%, to $9.7 billion, writes MediaBuyerPlanner.
Local radio is down 19% in Q309, while network radio is down 11% and off-air revenue is down 9%. On a brighter note, digital is up 14%, to $126 million. Year-to-date, digital is up 12%, RAB said.
Digital Still Bright Spot
The RAB noted that digital is still the bright spot for radio, pointing to the fact that despite economic hurdles, stations have supported and improved upon their brands’ online extensions – websites, online streaming, mobile applications – and provided content and programming that better addressed listeners’ demands and provided advertisers with additional marketing options.
The RAB also reported that, with each successive quarter, radio is experiencing narrowing gaps between previous year comparisons. Q309 total revenue stands at 84% of the Q308 level, and is a significant improvement over Q109’s 76%.
Category Specifics
- Communications, cellular and public utilities category advertisers rung up $337.6M in local/national spending to bring year-to-date spending to nearly $1.1B. The category retains the #1 radio category rank for the fourth consecutive quarter. Radio’s two top spenders lead the category: AT&T and Verizon.
- In the restaurant category, fast-food and fast-casual chains have maintained radio spending in Q309. For the quarter, category spending is 95% of the same period last year. Year to date is also outpacing radio as a whole, currently at 90% of last year. Dunkin’ Donuts again added its weight to the medium – it is up 24% in Q3 and up 33% year to date. Competitors McDonald’s and Wendy’s – radio’s top restaurant spenders – also have propelled their Q3 spending to the highest quarterly level this year.
- In the auto dealers/dealer groups/manufacturers/rentals category, the US government’s Cash for Clunkers federal rebate program gave the auto category a boost, helping it to its best quarter of the year. General Motors’ Q3 radio spending grew 101% over last year, while Kia jumped 145%, Volvo was up 26% and Hyundai grew 65%.With spending on the rise, automotive advertisers closed Q3 at 60% of last year’s spend – a significant turnaround from 40% in the Q109 – Q108 comparisons.
- In the television/networks and cable provider category, TV and cable advertisers’ spending moved radio’s Q309 to 86% of the Q308 level (compared with 72% in Q1 and 78% in Q2). This, the RAB said, indicated a very positive trend for Radio’s fourth-largest pending category.
The grocery/convenience/liquor stores category ended the Q3 period roughly flat at $203M. - In the beverages category, Anheuser Busch, the #2 ranked beverage advertiser, increased its Q309 spending an aggressive 66% – nearly $20M in additional advertising revenue vs. the same period in 2008.
- In the retail category, fringe advertisers – including JCPenney and Kohl’s – continue to promote value to cost conscious shoppers JC Penney increased its Q309 spending 106% to $17.3M and year to date 34% to $35.8M. Kohl’s was the third-highest category advertiser directly following JC Penney based on a Q3 increase of 43% (to $17.2M). Within the subcategory of home improvement, Home Depot remains the spending leader, with a Q309 spending increase, to $15.1M . Lowes boosted its third quarter spending up 16% to $26.1M across the Local and National sectors and was network radio’s Q3 spending leader.
- The rivalry between siblings in the specialty retailers category proved beneficial to radio’s local and national sectors. GAP Clothing and Old Navy significantly increased their Q3 spending by $11.9M and $6.3M respectively. An $12.3M increase by Levi-Strauss in Q309 vs. Q308 also created a positive impact within the category.
- With the health care reform debate and other hot issues commanding the nation’s attention, as well as many mayoral races and two off-year gubernatorial contests, spending in the political category reached $7.8M. Of that total, nearly 67% was dedicated to issue advertising with a focus on healthcare. Mayoral and gubernatorial races within the Northeast region dominated political candidate advertising and made up 28% of the category’s revenue. Q3 political spending accounted for 38% of the $20.9M YTD revenue. In the network radio sector, the US government was the leading advertiser in Q3 09 and year to date – $2.2M and $5.3M respectively.
- In the professional services category, salons touting low-cost stylists and walk-in hours continue to promote their businesses within the local and national radio sectors. Combined, three advertisers – Great Clips, Supercuts and Fantastic Sams – increased their third quarter spending 9%.
“As the quarter came to a close, it showed promise of an upswing in advertising spend by marketers,” said Jeff Haley, president and CEO of the RAB, in comments about the quarterly performance. “Increases in expenditures in highly competitive categories continue to positively influence radio’s bottom line.”
Declines at Major Radio Groups
MediaBuyerPlanner also reported that major radio groups saw declines that mirrored radio’s performance in the third quarter. Revenues at CBS Radio fell 19%, Beasley revenue fell 20%, and Entercom net revenues fell 14%. Emmis Radio revenue was down 26.5%, while Radio One revenue fell 12%.
ZenithOptimedia predicts that radio advertising will return to positive growth in 2011.
