RAB: Radio Revs Hit Low Note, Slide 16%

radio/down

 

Down is the new up -- at least according to the Radio Advertising Bureau, which found "positive turnaround signs" in a 16% decline in total radio ad revenues in the third quarter of 2009. That's compared to the same period last year, from roughly $4.95 billion to $4.15 billion.

This is a smaller percentage drop than the first and second quarters, when revenues fell 24% and 22%, respectively. But it's worth remembering that comparisons are also getting easier: The third-quarter decline compounded a 9% drop in the third quarter of 2008. This was the 10th straight quarter to see a year-over-year decline in total radio ad revenues.

The one area to see real growth was digital, which grew 14% to $126 million; for the year-to-date through September, total digital revenues have increased 12% to $347 million.

While these results are stronger than other traditional media with an online presence -- newspapers' online revenues continued to decline in the third quarter -- digital remains a small fraction of radio's bottom line in percentage terms. Een as total revenues tumble, digital contributed just 3% in the third quarter, as well as for the year-to-date.

Looking to the future, the RAB noted that local online advertising is a strong potential growth area for radio, citing a report from Piper Jaffray that stated: "Small businesses will begin to catch up with consumers online, bringing significant growth to the local online sector and moving local dollars from offline to the Web."

However, this prediction carries at least as much peril as potential for radio broadcasters. Their ability to cash in on local online advertising depends entirely on their investment in online platforms over the last several years -- when the recession forced many stations to cut back on long-term capital improvements.

If radio stations owners don't take the lead -- for example, by offering local advertisers integrated campaigns that also leverage broadcast assets -- they risk losing both broadcast and online revenues to a variety of local competitors, including newspaper and TV station Web sites.

1 comment about "RAB: Radio Revs Hit Low Note, Slide 16%".
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  1. Jonathan Mirow from BroadbandVideo, Inc., November 23, 2009 at 6:16 p.m.

    Look Ma! I'm only down 16% as opposed to 22%! I'm losing audience share at a slower rate. Aren't you proud of me?

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