Radio Set To Tune In A 10% Share Of Ad Spend

During a day-long conference that touched on what radio's fair share of the advertising mix should be, a new long-term forecast projected radio could amass nearly 10% of overall ad spending by 2012.

The Kagan World Media projection, which was released Thursday during the Kagan Radio Summit, anticipates radio ad spending will rise to $35.6 billion in 2012, or 9.7% what Kagan projections total ad expenditures ($367.2 billion) will be that year.

Compare that to Kagan's data for 2002, which totaled $19.6 billion in radio billings, or 8.2% of the $237.6 billion of total ad expenditures. This year is expected to finish 3.1% ahead of 2002, with radio's $20.2 billion share of the $245.9 billion ad spend. Radio's market share would remain at 8.2% this year, then by Kagan's estimates inch up beginning in 2004, reaching the 9% mark by 2008.

Radio executives attending the event believed that the industry might get to the 10% mark even sooner than that, although they declined to say precisely when.

Bruce Beasley, president and chief executive officer of the Beasley Broadcast Group Inc. in Naples, Fla., said promotional efforts in the industry are starting to turn the tide. He singled out the Radio Advertising Board, a New York-based trade organization, with making a major effort to raise radio's visibility and market share.

"We're going to get to 10% before '012," Beasley predicted.

Ralph Guild, president of Interep in New York, said that it was possible too as radio went from 6.5% to 8% of market share in the 1990s. He said that even a small fraction of a percentage point is worth a few hundred million dollars.

Matthew G. Fineberg, senior vice president/radio in the National Broadcast Department at Zenith Media Services in New York, said that the radio industry needs to look to the long-term and determine what their clients need and serve them not just as sellers of time but as marketing professionals themselves. He advised the radio industry to provide the best services they have to offer and not just think quarter to quarter, making goals.

"Understand what a client's need is. Don't just sell what you can't get rid of. Sell them [advertisers] what will move the needle and they'll come back next year," Fineberg said.

Fineberg said that radio sales forces should know what the advertisers' needs are and how radio can help them. But it wouldn't hurt for the sales force to understand what buyers and particularly planners have to go through before they make the decision to go with radio. He said the planning level was particularly key.

"That's where the budgets start to be allocated," he told executives. "Talk about reach, frequency, exclusive reach, cume ... [and] in comparison to other media on the local and national level." Don't just talk about how everyone loves a particular radio station.

"That really doesn't cut it anymore," Fineberg said.

He said that radio sales people need to be more educated on the terminology and the metrics of planners and buyers. Fineberg said planners make the best salespeople.

"It's a waste of my time to listen to another share speech," Fineberg said.

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