Radio: Ad Revenues On The Increase

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A few days ago, I wrote about a Quarterly Rebound for Radio in which we looked at Andrew Hampp’s positive prognosis for radio in his column over at Advertising Age. Well, he is now in august company having  that outlook, namely the CEO of Katz Media, Stu Olds. Olds has just distributed an email that speaks of a “robust” improvement in radio revenues, and strong trending for the first quarter of 2010. Via All Access:

Radio, which finished JANUARY up 26%, and is pacing 11% higher in FEBRUARY and 13% up in MARCH. Overall, the first quarter is pacing up 19%.

While 2009 comparisons are favorable, the strength of this turnaround — which started in DECEMBER 2009 (+16%) — is driven by broad-based category support, tightening marketplaces pushing up pricing and radio’s rediscovered value in the marketing mix,” OLDS wrote.

The seven categories that are driving this are Retail, Finance, Entertainment, Auto, Telecom, Consumer Products, and  Prof. Services. While the amount of increase varies from category to category, the three top ones all come in with over 30% increases in revenue. Consumer Products spend increased by 34.9%, Auto by 35.6%, and the biggest gorilla in the room, Entertainment, experienced a whopping 36.4% jump. No matter how you look at this, the tidings are good.

The increased demand is also creating sold out conditions in some markets along with a drastic reduction in the availability of low-cost/no-cost spots across multiple markets.

Then comes the follow-up punch. Due to the January ruling by the Supreme Court removing restrictions on corporate spending for political ads, we will be seeing a large uptick in that area. According to another All Access article, Borrell Associates has adjusted their forecast of political spending in light of this ruling.

“Midterm election-year spending now rivals presidential year budgets,” wrote Borrell. “If current trends hold, 2010 spending will surpass that of 2008.”

The Borrell forecast shows radio seeing an increase of $378 million, or 9% of the projected extra spending. All in all, I would say (cautiously) that 2010 is already shaping up nicely.

Image: Borrell Associates Logo / Fair Use: Reporting

Additional Note: I will be on my yearly vacation for the next week celebrating Mardi Gras and the Super Bowl victory of the New Orleans Saints. I’ve got some articles set up to publish while I am away so there will be no break in the blogging, I just won’t have the opportunity to respond to comments or emails until the 18th. Thanks for tuning in!

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