• by Erik Sass  @eriksass1, March 2, 2006

Top radio buyers expressed skepticism following Wednesday's release of Radio Advertising Bureau (RAB) estimates claiming overall ad revenue climbed by 1 percent and national ad revenue by 6 percent during the first quarter of 2006. Though not doubting the RAB's numbers, the buyers said they saw no evidence of an uptick in their own radio ad demand.

"I haven't seen an increase--certainly not a marked increase," said Kathy Crawford, president of local broadcasting at MindShare. "I'm not seeing an increase in even thinking about radio."

Mary Schiemel of TargetCast agreed: "To me it still looks flat. The demand is right where it was at the beginning of the year."

Schiemel and Crawford were especially dubious about the RAB numbers because radio performed poorly in 2005. An RAB report released at the beginning of February noted a 2 percent decline in national revenue, a 2.6 percent decline in network revenue, and a small increase of 1 percent in local ad revenue in comparison with 2004.

Much of the loss was due to the movement of automobile advertising away from radio to newer media like the Internet--a trend that is not likely to reverse any time soon, according to Natalie Swed Stone, a media buyer with OMD: "A new medium has been introduced, in the Internet, so a lot of the money from different media--not just radio--is going online. It would be foolish for anyone to expect that we're going to go back to a day when the Internet didn't exist, and I think broadcasters know they have to be pretty careful in terms of their projections." Indeed, financial analysts recently downgraded the radio sector's Wall Street ranking out of concern over the medium's performance.

Nonetheless, the soft radio market is a boon for advertisers, Swed Stone confirmed, allowing them to get more value for their dollar: "We're not going to try to grind someone down on rates, but we will try to get more value on integration, positioning--those kinds of things." Here, she pointed to a variety of bonus services broadcasters can provide that might have been priced out before: "You can get live leads, personality involvement, sponsored features--all these things that you can do on the radio in addition to buying spots. Most clients want more than spots--they want to break through. If the market were tight, it would be difficult to do that. But because prices are down, now you can."