Radio Revs Growing, Propelled By Political Ads

Radio-BoomboxTotal radio advertising revenues will grow 3.5% in 2012, according to BIA/Kelsey’s “Investing In Radio Market Report,” largely thanks to intensive political advertising. BIA/Kelsey also expects strong continued growth in radio’s online revenues.

In 2012 BIA/Kelsey sees total “over-the-air” local radio station revenues reaching just under $14.6 billion. If accurate, this forecast would be a welcome return to growth after a distinctly mediocre 2011.

Total “over-the-air” local radio station revenues barely grew from 2010-2011, edging up 0.4% to $14.1 billion last year. Looking ahead, it predicts total over-the-air revenues will reach $15.2 billion in 2013, $15.8 billion in 2014, $16.3 billion in 2015, and $17 billion in 2016.

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Radio’s total online revenues increased 15.1% from 2010-2011 -- reaching $439 million, according to BIA/Kelsey, and the analysts predict they will grow another 15% in 2012 to $505 million. They see radio’s online revenues reaching $767 million by 2016, suggesting a cumulative annual growth rate of 11% per year from 2013-2016.

The fact remains, however, that online revenues are still a relatively small part of the radio business, and will continue to be so for some time -- rising from just 3% of total revenues in 2011 to 4.3% by 2016, in the researcher's forecast.

Radio also has to make up the steep revenue losses suffered during the economic downturn. Total revenues in 2011 were off some 20% from the peak value of $18.1 billion in 2006, per BIA/Kelsey. The 2016 figure still has revenues more than $300 million short of the 2006 level.

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