Research firms and consultants are producing another crop of year-end forecasts and analysis -- which bode both good and ill for traditional media. Radio revenues should end 2010 up 5% to $14 billion, according to BIA/Kelsey, which recently revised its industry estimate upwards to account for especially strong political and automotive ad spending. The numbers include disproportionate gains of 9% or more in a number of top metro markets, such as Boston, Philadelphia, Miami and Denver.
What's more, BIA/Kelsey sees more growth in the years ahead, predicting a 3.6% increase to $14.5 billion in 2011, followed by 5% growth in 2012 to $15.2 billion; 4% growth in 2013 to $15.8 billion; and 3.8% growth in 2014 to $16.4 billion.
Acknowledging steep losses over the last couple of years, BIA/Kelsey Vice President Mark Fratrik stated: "We might be a long way from pre-recession over-the-air revenue numbers, but broadcasters are supplementing those revenues by taking steps to change the landscape by attracting advertisers through online and mobile, and also by extending their signals to attract new listeners."
This positive outlook was tempered somewhat by a more conservative forecast from Borrell & Associates, which sees a rebound in marketing spending by retailers over the next couple of years -- but little direct benefit to traditional media. The reason: most buys will be steered to channels other than advertising. This surge of direct-to-consumer marketing will primarily benefit emerging digital platforms, especially mobile coupons.
Overall, Borrell sees total marketing spending by U.S. retail operations increasing from $251 billion this year to just under $300 billion in 2015, but advertising will get an increasingly small proportion of that money. The share of retail marketing spending going to advertising shrank 37% this year and will contract another 33% by 2015.
With the increase in overall spending, that means ad spending by retailers will increase about 1% per year, compared to an annual rate of 5% for "promotions and other non-ad spending," including "couponing, product placement, contents, and online interaction directly with shoppers -- especially on mobile devices."