• by September 7, 2000

By Anya Khait The coming of the Internet and radio streaming capabilities seems to have done little damage to the success of traditional Radio industry. In fact, they have been a benefit, as more and more dot-coms have taken to advertising on the airwaves.

The second half of 2000 got off to a productive start for the Radio industry as combined local and national advertising revenues climbed 11% for the month of July. When compared to the same month last year, July's local ad sales were 11% better in 2000, while national dollars showed a 9% gain, making it the 95th consecutive month of sales increases for the Radio industry.

On a year-to-date basis, both local and national advertising sales remained well ahead of the previous year. Through the first seven months of 2000, local ad figures were 17% higher than 1999. Nationally, year-to-date revenues were up 27%.

Among the nation's five marketing regions, the East registered the best month for local sales in July with a 15% increase, followed by the Southwest (13%) and West (12%). The East region also led the way in national advertising revenue after a 17% gain during July, while the Southeast was 12% higher.

"We're seeing a pattern for sustained growth with the July numbers," said Gary Fries, President & CEO of the RAB. "Radio continues to exceed its already strong performance from 1999, and as we segue into the second of 2000, we can anticipate revenue figures will remain steady."

However, the end to Radio's success might be near. Both Clear Channel and Entercom shares fell $3.88 last Friday on analysts' concerns that radio ad growth will slow in the third and fourth quarters as fewer dot-com firms buy time and the radio ad market runs out of room for rate increases. CCU closed Friday at $68.50 on volume of 14.2 million shares - almost five times the three-month daily average - while ETM closed at $37.44, a four-month low.

Analysts say Clear Channel and Entercom were hit hard because of their presence in "wired markets": cities that have a large Internet company presence. "Markets that have a lot of dot-com business are really feeling the pain now," Thomas Weisel Partners analyst Gordon Hodge tells Bloomberg, because that money is no longer there.

Will Radio advertising revenues continue to rise? No one has the crystal ball but the next few months will be crucial to the industry's success.

- MediaPost Staff Writer Anya Khait may be reached at Anya@mediapost.com