• by Jack Loechner , Staff Writer @mp_research, September 13, 2007

Non-Spot and Network Keep The Volume Up in Radio Revenues

According to the latest RAB Revenue Release, Non-spot activity remains a highlight for Radio, continuing on a strong growth trend from innovative brand extensions to the Internet and enhanced event marketing sponsorship packages.  Non-spot revenue showed double-digit gains the second quarter of 2007 as wellas the first half of 2007, compared to those same time periods from last year, helping to offset slight dips in other segments as total Radio spending remained virtually flat. 

Jeff Haley, President and Chief Executive Officer of the Radio Advertising Bureau, says "The average monthly non-spot revenue growth rate for the last two years has been 10%. At this rate, non-spot revenue will be over $1.5B for 2008 and approach $2B by the end of 2009... The majority of non-spot revenue is coming from stations' online efforts."

 Political spenders placed 26,330 units on Local Radio in first half 2007, increasing from 22,502 in same period 2005. Noted for localism and targetability, Radio is poised to capitalize on a major share of the $3 billion forecast to be spent now through November 2008.  

 Several advertiser categories outpaced Radio spending overall to boost Radio's economy in the second quarter of 2007.  These categories were also key spenders over the first half of the year

 Spending by the automotive category's top 25 advertisers was driven by hefty investments from American-model manufacturers and dealers. 

Advertisers in the Insurance category boosted spending 13.7% in Q2 '07 vs. Q2 '06, resulting in a healthy 7.3% increase for the year through June compared to last year's first half. Hot advertiser GEICO apparently knows that Radio coverage works, as they upped their spending 49% in the Q2 period, winding up 31% ahead, year-to-date.

The entertainment industry continues to be of importance to Radio with a Q2 '07 increase of 4.8% and 11.2% growth for '07 year-to-date. The Top 12 advertisers for the quarter outpaced the category, grew by 26%, and accounted for 14.7% of the Q2 '07 revenue; predominantly attributed by movie house spending (71.6% of top 11).

One of Radio's winning tickets for growth, says the report, are Casinos and the Lottery. Q2 '07 spend hit 5.8% over the same quarter last year bringing the year-to-date to a 9.1% increase. State Lotteries continue to take the lead, not just in the quarter but also year-to date, accounting for 39% of the quarterly category total and 41% of it year-to-date.

Radio stayed fairly robust in the Health Care spending arena for the first half of 2007 (up 5.5% over same period '06), with a slight bump in spending in Q2 '07 vs. Q2 '06 (1.6%). Eye care surgery/vision centers focused more money on Radio in Q2, upping their spending by 51% over Q2 '06, with the result that year-to-date spending in this area has pulled 31% ahead of last year.

Local and national revenues are based on a pool of more than 150 markets as reported by the accounting firm of Miller, Kaplan, Arase & Co. and extrapolated to the entire U.S.  Network Revenue includes the top five Radio network companies.  Non-Spot data has been collected and verified since January of 2002, and reported since September of 2004.

Visit here for the full report from the RAB in a PDF format.