• by Paul Gough , March 2, 2004

Base on the results of another major medium - radio - 2004 isn't getting off to the strongest of advertising starts. Radio ad spending - both national and local - was flat in January, according to a monthly report released Monday by the Radio Advertising Bureau. Radio's lackluster results follow a similar pattern for other major media, including consumer magazines, national newspapers and Sunday newspaper magazine supplements, all of which appeared to be turning the corner at the end of 2003, but which instead turned south again during the first month of the New Year.

It's been a long, strange trip for the radio industry, which is in turmoil in other areas, including a federal inquiry into broadcast decency and finger-pointing and one-upmanship among its major players.

Recent research from its own ad trade group - the RAB - also revealed that radio has one of the lowest regards on Madison Avenue in terms of its accountability as an advertising medium, including its core audience research methods, as well as its schedule integrity, and there appears to be only mixed support for the rollout of a promising new research technology - portable people meters - being developed by Arbitron.

Meanwhile, radio, which appeared to have broken out of advertising slump a year ago in January when it began boosting sales gains, remains on uncertain footing.

Radio industry executives sounded bullish and they had the revenues to prove it, with national and local sales ringing up in convincing fashion. It continued into February until the worries over a possible war in Iraq -- and then the war itself -- sent advertisers scurrying and radio stations left holding the bag. Since the summer, the radio industry has seen what looked like another recovery on the wing only to be disappointed by another dip.

January is the weakest month of the year in ad-supported media. Yet last January, the recovery in progress, revenues were up 6 percent industry-wide compared to January 2002.

The fourth quarter and full year results at most of the publicly-traded station groups have been nothing to write home about, which was pretty much the story for most of 2003. Or if revenues were up, it was due to the impact of acquisitions. That was the case with Cumulus Media Inc., which saw a nearly 6 percent increase in revenues in the fourth quarter. The increase was due to station acquisitions in 2003.

At Cox Radio, the third largest radio company in terms of revenues, revenues were up 1 percent in 2003 compared to a year ago. National revenues were up 7 percent but local ads were down 2 percent compared to 2002.

"I'm very proud of what we accomplished in what was anything but a normal year for radio, our economy or our country," said Cox Radio Chief Executive Robert F. Neil, in a conference call with analysts last week.

Clear Channel Communications, which by far owns the most radio stations of any company in the United States, revenues were down 1 percent in the quarter and the new year. Local advertising, which is generally 80 percent of revenues for a station, was blamed.

Yet at the same time, radio executives say they're optimistic about the future. They believe the growth will accelerate in the second half of the year. Randall Mays, chief executive officer of Clear Channel Communications, noted that January was better than December, February was better than January and March and April seem to be pacing better than February.

Cox's Neil said there are signs that conditions are improving, with qualifications.

"The overall tone of business has improved but indications are that revenue continues to be erratic, with a wide disparity between markets," Neil said.

Nine of Cox's 17 markets were down in total revenues for January, including some of its largest markets like Miami.