RAB: Radio Revenues Fall 22% In Q2
August 21, 2009: The RAB reports that radio revenues were down by 22 percent overall in the second quarter of this year, to $4.2 billion, with local down 25 percent, to $3.4 billion; national down 24 percent, to $591 million; and local and national combining for a 25 percent drop, to $3.4 billion.
Network fell by 10 percent, to $274 million, while off-air revenue fell 13 percent, to $355 million. Digital was the lone bright spot, up 9 percent, to $120 million in the quarter.
RAB President/CEO Jeff Haley said that "we are most likely past the Q1 low point for radio revenues and are now on the rebound." The RAB notes that much of the weakness in Q2 and the first half is linked to marketers associated with the auto industry -- now down to radio's number three category -- and major retailers.
Haley said, "Taking advantage of radio's core strengths, advertisers marketing to the price/value consumer are increasing their share of voice on the airwaves -- providing encouraging signs." The RAB cited the restaurants, communications, and automotive categories, particularly auto imports. Particular advertisers upping spending include Subway, Dunkin Donuts, Boost Mobile, US Cellular, Metro PCS, Mitsubishi, Volvo, and Honda .
On the digital side, RAB said, "Digital will be an increasingly important sector as radio continues to evolve into a cross-platform medium. The ability to leverage local advertisers should boost revenue significantly." The RAB cites a BIA projection showing digital revenues for radio rising steadily over 2007-2013.
Restaurants was the top radio category in Q2 and in second place year-to-date. Dunkin Donuts has spent 37 percent more on radio this year and 23 percent more in Q2, spending $24.4 million. and Jack in the Box, White Castle, and Arby's have made "huge additional commitments" to radio, the RAB says, and Subway has moved up its spending by 21 percent, to $24.7 million in the second quarter. McDonald's remains the biggest restaurant spender, and radio's third-highest spender overall.
Communications/Cellular/Public Utilities was the number two category in Q2, with AT&T still on top but Verizon creeping up and becoming radio's second-biggest spender in the quarter. Smaller carriers are also stepping up their spending, including Qwest, up 57 percent; Leap, up 44 percent; and Boost Mobile, up 34 percent.
Automotive "may be turning the corner," the RAB said, with "some reason to hope the slowdown is easing." The category was still down 50 percent from Q2 2008, but that was better than the 58 percent drop in Q1. Among those spending more in the quarter were Mitsubishi, up 36 percent, to $9.9 million; Volvo, up 109 percent, to $7.2 million; and Hyundai, up 49 percent, to $5.3 million. GM also upped its spending by 27 percent, to $8.9 million, and Ford was up 13 percent, to $2.9 million.
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