• by Jack Loechner , Staff Writer @mp_research, October 21, 2002

Though the radio industry concluded 2001 off 7% in total ad sales, the theater of the mind continues to be the medium leading the way out of the recent economic slump, with positive growth in radio ad sales for March 2002. According to a recent release by the Radio Advertising Bureau, local, national, and combined total sales figures all increased by 1% in March compared to the same month a year ago. And relative to 1998, the RAB index of local and national advertising through the first quarter is 129.8 — a 30% increase.

CMR says U.S. ad spending for all media in the first quarter increased 0.4% over the same quarter in 2001, reaching $23.5 billion, with network radio leading the media in relative growth at 12.3%. At the same time, advertising revenues on cable TV fell off 15.9% and the Internet fell 14.2%.

According to Gary Fries, president and chief executive officer of RAB, "History has shown that radio is the most resilient of all advertising media and the first medium to post positive growth following a downturn. Radio’s cross section of advertising categories makes it less vulnerable to unexpected fallouts from one or two advertising sectors. Radio is positioned for steady recovery as we approach the end of the second quarter and move into the third quarter."

Radio retained its position as a mainstay medium over the past year by reaching all demographics in all locations, both in and out of home. Findings contained in the Arbitron Radio Usage Report indicate that over the course of a typical week, radio reached 99% of adults 18 and over who hold a professional/managerial position and who live in a household with an income of $50,000 or more. Ninety-eight percent of college grads listened to radio, while 93% of people who did not go to college listened to radio over the course of a week.

Radio reaches more than 227 million people weekly, or 96% of all persons age 12 and older. And radio doesn’t take the weekend off. More than 190 million people — 80% of all persons 12 and over — tune in to radio on Saturday or Sunday. Arbitron also reported that while 95% of Americans listen to broadcast radio for at least five minutes a week, the equivalent figure for Internet radio is only 8%. "Even though the economy is tough and uncertain, it presents opportunity for the radio industry," said Fries. "Advertisers’ reliance on radio has increased over the past year. Radio is well positioned for positive growth in 2002."

Radio’s advantages include a high amount of time spent listening, superior targetability, superior listener loyalty, ad recall, and message retention. Advertisers who recognize the power of radio have voted with their budgets. Prior to the downturn in 2001, no other medium could claim more than seven years of uninterrupted revenue growth, says the RAB Factbook.

However, in spite of radio’s reach and enthusiasm for growth, its total impact in the forecasted ad spending market for 2002 is $18 billion, compared to $55 billion for TV, $46 billion for newspapers, $11 billion for magazines, and $47 billion for direct mail. Growing, but not dominant.