• by Paul Gough , August 10, 2003

With a flurry of second-quarter reports released in the past week, a picture of the underlying health of the media economy is gradually coming together. While more data will be released over the next several weeks, the snapshot so far reveals a relatively strong expansion in national ad spending, but a relatively stagnant local media marketplace.

Cable TV and radio data released last week show a divide between national and local ad sales. Recovery in the form of high single-digit or double-digit increases has emerged nationally while local remains mired in a slump. And ad revenues rose slightly at ABC, NBC and CBS, balancing a strong primetime and late night with falling children's and sports categories.

Friday's two reports, from the Broadcast Cable Financial Management Association and the Radio Advertising Bureau, were the second in a wave of second-quarter and first-half data from trade groups, media companies and syndicated services. They showed network TV healthy in most areas and glimmers of hope in the national spot radio market.

Network TV gross ad revenues reached $3.16 billion in the second quarter, up about a half-percent from the same period a year ago, according to the data from the Broadcast Cable Financial Management Association. First-half gross ad revenues were off 5.75% to $6.29 billion compared to 2002, but the $384 million drop included fall-off from children's programming and the 2002 Winter Olympics. Every other daypart registered gains in the first half, including primetime (up 12.69% to $3.59 billion), late night (up 18.21% to $394.82 million), morning (up 14.36% to $429.69 million) and daytime (up 6.85% to $512.56 million).

The Broadcast Cable Financial Management Association's data is incomplete for tracking total network spending, since it doesn't include ad revenues from The WB, Fox and UPN. Local broadcast spending data isn't tabulated either but will be available in reports released soon by the Television Bureau of Advertising and syndicated services. Market data from Nielsen Monitor-Plus finds national spot ad sales on broadcast TV increased 4%. National spot cable sales increased but a MediaPost analysis last week found the local cable ad sales sector lagging.

The divide also shows up in radio, with the Radio Advertising Bureau reporting ad spending up 7% in national spot in the first half but a relatively flat 1% locally. Local radio dropped 2% in the second quarter, compared to a 7% rise in national spot. June, the last month of the report, was flat locally but up 16% nationally. RAB said in local ad spending was restrained by the economy and world turmoil but predicted a recovery in the second half.

The war in Iraq seemed to derail a good January and February in the national spot business but has picked up since mid-May, said Michele Skettino, vice president of consumer marketing at Interep. But she said Friday that advertisers were still booking their campaigns closer to their start dates. She said it wasn't surprising that local ad spending lagged in the advertising recovery.

"National tends to lead the way. It's often the first when things decline and the first to come back," Skettino said.

Viacom, which owns Infinity and Westwood One radio networks, said local and national spot ad sales rose 3% in the quarter and was stronger as the quarter progressed. June's revenue was up 8% compared to a flat May and a slight decline in April. Viacom President/COO Mel Karmazin told analysts recently that pacings were strong and by mid-July ad sales had already surpassed July 2002.

"We are guardedly optimistic that radio is heading back," Karmazin said at the time.