• by Jack Loechner , Staff Writer @mp_research, June 2, 2010

Reflecting growing signs that the U.S. economy is back, radio delivers its best results in quarter-to-quarter revenue comps since Q1 2007 with a +6% overall increase to $3.687B. This gain represents the highest posted in nearly a decade, according to the recent study by the accounting firm of Miller, Kaplan, Arase & Co. reported by the The Radio Advertising Bureau with more than 6,000 member Radio stations in the U.S. and over 1,000 member networks, representative firms, broadcast vendors, and international organizations.

Revenue Comparisons - 2010 vs. 2009 ($ In Millions)
Revenue	$Q1 '10	% Chg
Local	2,450	2%
National	568	19%
Local & National Combined	3,018	6%
Network	260	6%
Digital	123	18%
Off-Air	286	Flat
Grand Total	3,687	6%
Source: Miller, Kaplan, Arase & Co., May 2010

According to the report, the Eastern Region outpaced the rest of the nation in ad spending gains for Q1, up 12.7% - followed by the Southwest and Central Regions, up 9.7% and 6.7%, respectively. Spending is up but trails nationwide growth in the West (4.5%) and South (3.5%).

RAB President and CEO, Jeff Haley, says "Our growth in this recovery is showing signs that Radio's momentum is outpacing that of other traditional media... underscoring Radio's inherent strength with advertisers demonstrating renewed enthusiasm for spending in our medium... advertisers have found and, in many instances, rediscovered Radio. With ever-expanding Digital and Off-Air vehicles adding to Radio's appeal... this growth trend will continue to gain momentum," Haley concludes. 

Local and National Radio Leading Growth Categories (Q1 2010; $ in Millions)
Category	$Q1 '10	% Chg
Communications/Cellular/Public Utilities	350.5	6%
Television/Networks/Cable Providers	276.2	23%
Auto Dealers/Dealer Groups/Manufacturers/Rentals	230.6	39%
Financial Services	191.6	49%
Grocery/Convenience/Liquor Stores	187.2	27%
Home Improvement	31.0	18%
Source: Miller, Kaplan, Arase & Co., May 2010

 Communications/Cellular/Public Utilities, a strong category for Local and National Spot Radio throughout the past year, regains the top spot in Radio spending in Q1 '10, at $350.5M - an increase of 5.7% over a comparatively strong showing in Q1 '09. Battling cellular services AT&T ($108.3M) and Verizon Wireless ($104.1M) dominate the sector, comprising approximately 61% of total spending.

A huge boost in spending by its leading advertiser Comcast Cable (+32%, to $60.9M) propelled Television/Networks/Cable Providers into Radio's #2 rank for Q1 2010, up from 3rd in Q1 '09. The category grew 23% overall, to $276.2M.

TV broadcasters, cable networks, and access providers increasing spending to contribute to Q1's impressive gain include:

• ABC-TV Network (+105%, to $31.6M)
• NBC-TV Network (+321%, to $29.3M)
• USA Network (+429%, to $11.7M)
• CBS-TV Network (+121%, to $10.5M)
• Charter Communications Cable (+42%, to $9.0M)
• Cablevision (+132%, to $5.3M)
• Telemundo (+309%, to $5M)
• Cox Communications Cable (+45%, to $3.5M),
• ESPN (+107%, to $3.1M)
• HBO (+98%, to $2.2M)

With year over year spending virtually flat, the Restaurant category flips from 2nd in Q1 '09 to #3 this year, at $260.4M. McDonald's remains Radio's third-largest advertiser for this quarter, at $71.7M. Major competitor Wendy's Radio spend of $22.8M represented an increase of 18%.

The automotive industry's turnaround has been prominently in the news over the last several months, and the sector's spending on Radio is also rebounding. The Automotive category's very positive +39% uptick to $230.6M is cause for optimism for the year ahead. As in Q1 2009, Automotive occupied the #4 rank for spending this quarter.

Local and National Radio Auto Dealers/Dealer Groups/Manufacturers/Rentals (2010 vs. 2009; $ in Millions)
Advertiser	$ Q1 '10	% Chg
Nissan Dealer Association	$30.0	134%
Toyota Dealer Association	25.7	107%
Daimler Chrysler Plymouth Dodge Jeep Corporation	24.7	652%
Chevrolet Motor Corporation	14.8	328%
Honda Dealer Association	13.5	104%
Nissan Motor Corporation	13.4	98%
Lexus Dealer Association	8.6	365%
Chevrolet Dealer Association	7.5	107%
Source: Miller, Kaplan, Arase & Co., May 2010

Lower in the spending ranks but also using more Radio to broadcast their sales appeals in Q1 were:

•       Ford Motor Corporation (+18%, to $5.3M)
•       Infiniti Motor Corporation (up nearly six-fold, to $4.3M)
•       Honda Motor Company (+98%, to $3.2M)
•       Mazda Motor Corporation (at $2.7M, up from $60.5K)
•       Hyundai Dealer Association (+49%, to $2.2M)

 Financial Services moves into Local and National Spot Radio's Top 5 this quarter with expenditures of $191.6M, up by nearly 50% from last year's Q1 spend of $129M (#7). An analysis of the top Q1 '10 Radio spenders finds a new order, with several smaller and/or regional banks moving into the top ranks:

•       JPMorgan Chase emerges as the leading Financial Services category advertiser (was #2 behind Citibank last year) increasing its Radio investment by 138%.
•       Chase is also tied with Communications advertiser MetroPCS as Radio's 6th largest spender overall for the quarter.
• Other major financial service accounts that added Radio dollars in Q1 are:
•       PNC Bank (+59%, to $15.1M)
•       Wells Fargo Bank (+53%, to $13.4M)
•       Capital One (up nearly six-fold, to $11.4M)
•       Fifth Third Bank (+75%, to $11.3M)
•       Bank of the West (at $6.3M, from $604K)
•       American Express with a $20.5M commitment versus just $24.9K last year

Despite an impressive 27% increase in spending, Groceries dropped to 6th place in overall Q1 Radio spending, at $187.2M. Top category spender Safeway ranks overall as Radio's 4th-largest Q1 advertiser at $60.5M, an increase of 63% over Q1 2009. Additionally on radio:

•       Kroger Food Stores (+14%, to $27.7M)
•       Supervalu (+4%, to $13.7M)
•       Fresh & Easy Neighborhood Market ($7.5M, from $783K - up nearly nine-fold)
•       Trader Joe's (+29%, to $7.1M)
•       A&P Supermarkets (up six-fold, to $5.1M)

Insurance companies spending in Radio's #7 sector was flat at $139.1M, though the category is significant in that it is led by 5th-ranked Radio advertiser GEICO ($40.5M in Q1 2010). Increasing competition for low-rate automotive coverage appears to be a major factor in Radio sustaining dollars in this category:

•       State Farm Insurance (+151%, to $26.9M)
•       Progressive Insurance (+212%, to $11.1M)
•       Safe Auto Insurance (+37%)
•       Esurance (+51%, to $3.1M)
•       Titan Auto Insurance ($3.2M, up from $3.7K last year)

Growing consumer optimism has generated a building boom for home fix-up retailers in the early months of 2010, and the major players in the category have added to their Radio budgets as they compete to attract customers to their stores. Radio's revenue from Home Improvement advertisers grew 18% over Q1 '09 to $31M, with added spending by all four major players.

Retail Local and National Radio (2010 vs. 2009, $ in Millions)
Advertiser	$Q1 '10	% Chg
Walmart	13.7	74%
Kohl's	13.6	126%
Home Depot	12.7	18%
Orchard Supply Hardware	8.0	16%
Lowe's Home Improvement	5.8	61%
Burlington Coat Factory	4.1	42%
Meijer Discount Department Store	3.2	53%
Source: Miller, Kaplan, Arase & Co., May 2010

 Other categories reported on in detail include:

•       Specialty Retail
•       Concerts/Theaters/Movies
•       Beverages
•       Political

For more details and additional information about the study, please see the PDF file here.