Radio Revs Dial Down

The radio industry’s total ad revenues fell 3% from $4.68 billion in the second quarter of 2013 to $4.54 billion in the second quarter of 2014, according to the latest figures from the Radio Advertising Bureau. The decline comes on top of a flat second quarter, contributing to a first half drop of 1%, from $8.42 billion to $8.33 billion.

The RAB attributed the overall decline to a drop in spot ad revenues, long the mainstay of the radio business, which fell 5% to $3.55 billion in the second quarter, while network revenues were flat at $286 million.

Lower spot revenues were partially offset by an increase in digital ad revenues, up 9% to $242 million, and off-air revenues, up 13% to $460 million. For the first half of the year, network ad revenues were down 3% to $534 million, while digital rose 12% to $449 million and off-air rose 15% to $853 million.

Despite the overall decline, a number of major categories saw increased spending in the second quarter, including home improvement, up 4%; professional services, up 3%; and health care, up 1%. Among smaller categories, substantial percentage gains were seen in real estate and retirement communities, up 19%; auto parts and services, up 14%; and specialty retail, up 11%.

On the negative side, beverages were down 23%, communications and cellular fell 14%, concerts, theaters and movies slipped 11%, financial services declined 7%, insurance dropped 13%, restaurants tumbled 15%, and retail plunged 17%.

Political advertising has also been disappointing, failing to meet expectations for a midterm election year with many hotly contested congressional and 38 governorships up for grabs in November. In the second quarter, radio failed to benefit much from primaries because many of the close contests were in smaller markets.

However, the RAB cited some reasons for optimism, including the high-stakes battle for control of the Senate, active SuperPACs, and a number of contentious state ballot initiatives, which could all drive more political ad spend for radio.

As in previous quarters, the growth in digital spending is a bright spot, but digital ads remain a small part of the overall business, contributing just 5.3% of total revenues in the second quarter and 5.4% in the first half of the year.

"Radio" photo from Shitterstock.

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