The first-half decline was led by falling local and national revenues, down 6% to $6.98 billion and 11% to $1.4 billion, respectively. These figures are in line with recent survey results showing advertisers are cutting back on spending during the economic slowdown; traditional media like newspapers, radio, and magazines are taking some of the biggest hits.
Continuing another trend, radio stations in smaller markets performed much better than counterparts in midsized and larger markets, according to Jim Boyle, a radio analyst with CL King and Associates. Considered separately, radio stations in smaller markets saw revenue up 2% compared to last year, on average, while stations in mid-sized and larger markets are down 5% and 7%, respectively.
Smaller markets are faring better for a couple reasons. They were spared the fierce price wars which undercut big markets over the last two decades, as big radio groups battled for market share in major metro areas. In addition, small market stations often have closer relationships with local advertisers that tend to be more conservative in their media strategies.
Aside from small markets, online is one of the few bright spots for radio, although its contribution to total revenue remains relatively small.
In the first half of 2008, the off-air ad category, which includes online, grew 12% to $889 million. At this rate, the RAB claims off-air revenue should exceed $2 billion by the end of the year. While this is welcome news for radio, the first half of the year contributed only 9% of total revenues. What's more, online provides only part of off-air revenues, which also include experiential marketing. The RAB didn't release a specific figure for online revenues.