Modest Radio Revenue Growth Forecast

December 1, 2011

This article is included in these additional categories:

Automotive | Brand Metrics | Financial Services | Food & Restaurants | Media & Entertainment | Radio | Uncategorized

bia-kelsey-radio-industry-advertising-revenue-2005-2015-dec11.gifRadio industry over-the-air (OTA) revenues are forecast to grow a moderate 3.5% to $14.7 billion in 2012, according to a report released in November by BIA/Kelsey. Data from “investing in Radio Market Report” indicates that the radio industry has experienced only muted OTA revenue growth in 2011, projected to end the year with $14.2 billion in revenues, up marginally from $14.1 billion in 2010. The 5-year-outlook shows radio’s OTA revenues growing to $16.6 billion by 2015.

Digital Growth Stronger

The industry has experienced healthier growth in digital/online revenues, however, forecast to end the year at $479 million, representing a 15% increase over $405 million in 2010. The 5-year-outlook indicates radio’s online/digital revenues will reach $758 million by 2015, representing a 13.4% compound annual growth rate.

Q3 Growth Continues Momentum

Meanwhile, according to [pdf] figures from the Radio Advertising Bureau (RAB), radio revenues grew to $4.5 billion in Q3 2011, representing 2% growth from Q3 2010, and capping 7 consecutive quarters of upward momentum. RAB data indicates that year-to-date revenue is also up 2% over the same period in 2010, increasing to $12.9 billion. Digital once again posted the largest gains for the quarter, up 17% year-over-year to $190 million, and also posting the largest year-to-date gain compared to 2010, rising 18% to $524 million. Off-air also showed healthy year-over-year growth for the quarter (10%) and for the year-to-date (8%), while spot revenue remained flat at roughly $3.7 billion for the quarter.

Insurance Companies Spending Soars

rab-spot-radio-spending.jpgInsurance companies spent $270 million on spot radio in Q3 2011, representing 48% growth from Q3 2010, and making insurance the 3rd-largest spot radio spending category. Auto dealers/dealer group manufacturers took the top spot, with $393 million in spending, up 6% from Q3 2010, followed by restaurants, which increased spending 15% to $375.4 million.

Radio Increases Brand Affinity

Meanwhile, results from an evaluation of radio campaigns by Ipsos in partnership with Katz Marketing Solutions indicate that radio can positively impact brands throughout the purchase funnel. Comparing results from people who had listened to at least one of the stations included in a radio campaign with a control group of people in the same markets who had not listened to those stations, the findings demonstrated that awareness was up an average of 10% among radio listeners, with similarly impressive increases for familiarity (16%), affinity (12%), purchase/consideration (39%), and recommendation (10%).

About the Data: RAB’s Spot Radio, Digital and Off-Air revenues are based on a pool of more than 100 markets as reported by the accounting firm of Miller, Kaplan, Arase & Co. and extrapolated to the entire US. Digital Revenue is comprised from activity generated by websites, Internet/web streaming and HD Radio including HD2 and HD3 stations. Network Revenue includes the top five Radio network companies.

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