The State of Affairs for Radio Advertising

[Kevin Amos]

Here is something that some of you will be interested in. Now if this is talking about commercial radio in general where do you think this leaves the remaining Jazz stations and public radio?

Kevin

**
Signal Fading: Radio 4Q Revs Down 11%
by Erik Sass, Friday, February 20, 2009


Feeling the effects of the sharp economic downturn, radio took another big hit in the fourth quarter of 2008, according to the Radio Advertising Bureau. Total ad revenues fell 11%, compared to the same period in 2007, to $4.65 billion.
This contributed to an overall 9% slump for full-year 2008 compared to 2007, to just under $19.5 billion. Worse, these losses are compounding an earlier round of revenue declines in 2007 compared to 2006. The fourth quarter of 2008 was the seventh straight quarter to see radio ad revenues decline.

As in previous quarters, the worst losses in dollar terms came in local advertising, traditionally a mainstay of the radio business. The category tumbled 13% in the fourth quarter, to $3.17 billion. National advertising fell 14% to $735 million. While a smaller part of the business, the national category serves as a bellwether of advertisers' feelings about the medium in general.

Internet advertising provided the sole bright spot on the radio ledger book--but even here the slowing economy made its presence known, with an anemic 1% growth rate in the fourth quarter for the "off-air" category, which includes online.

For the full year, the category grew 7%, leading Jeff Haley, RAB's president and CEO, to assert that off-air revenues will surpass $2 billion in 2009. However, this assertion looks rather optimistic in light of the dramatic slowdown over the course of the year. Off-air grew 15% in the first quarter of 2008, 10% in the second and 5% in the third.

What's more, even if radio revenues did grow as quickly as Haley's forecast, off-air revenues still will be unable to offset the steep losses on the "traditional" broadcast side.

The 11% overall decline between the fourth quarters of 2007 and 2008 equaled about $750 million--dwarfing the increase of about $4.4 million in off-air revenues.