Radio Revs Up From Abyss

New Media Analytics and Metrics for the Radio Industry

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AG News: Tuesday - 5/25/2010

Radio Revs Up From Abyss

Cause for celebration is being trumpeted in every radio industry trade mag. "Radio Advertising Bureau Announces 6% Increase" is the essence of nearly every story. Compiled by Miller, Kaplan, Arase & Co., the data shows this as the best quarter-to-quarter revenue comparison since 2007. The $3,687 billion posted in Q1 2010 reflects the best increase since Q3 2002.

Read RAB reflection on Q1 here. But let's be careful when going through this news release. Ask questions like: If Local advertising is up 2% and it represents 70%-80% of radio revenue, shouldn't there be a little explanation in this report on "local" revenue categories?

National buoyed this boost with a 19% rise, and Q1 Report's data focuses on it. But Local is where radio's backbone is found.

The word "local" appears 14 times in this news release. Nearly every time, "local" is associated with the word "national" as in "Local & National Combined." Separating these two defines radio's weakness - which helps determine where resources need to be applied.

As we crawl out of the economic downturn, there needs to be a better understanding of how a radio program can be tied to the internet, with the industry paying attention to how media buyers are accounting for dollars spent. If the radio industry applies effort here, we'll see a larger increase in local for Q2 2010 and beyond.

Year-to-Year national radio advertising revenue may be up 19% in Q1 2010, but if you place that stat against the Q1 revenue loss of radio's major groups in 2009 (and keep in mind national spend only represents 20% of total radio revenue), how excited should that make you feel?

Take heed from AdAge writer Mark Lipsky, in an article written in January 2009: Like warriors entrenched in battle, radio's leaders have lost sight of the big picture. Revenue isn't down because of Sirius XM or iPods or any of the 101 other things that were trumpeted as slayers of terrestrial radio. It's down because new media have empowered marketers to measure and manage the results of their advertising campaigns. And radio has been slow to accept the rules in the new world order of advertising.

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