Did you think last year was a gloomy one for revenue in the U.S. commercial radio industry? The RAB now confirms it.
After several years of essentially flat overall performance, revenue turned south, falling 9% in 2008, according to the Radio Advertising Bureau, and more sharply in the last quarter, 11%.
According to Radio World records, 2008 ended with the worst revenue performance for the industry in at least the 28 years since RAB began tracking the number. The previous worst over that period of time was 2001. The industry’s total revenue now is estimated at $19.4 billion, including off-air, RAB said.
“Radio’s fortunes paralleled the U.S. economy,” the organization stated. “While the year began optimistically, factors impacting myriad industries combined to create economic uncertainty by year-end.”
Looking back, radio’s performance in 2007 was down 2% from the year before; in 2006, it was up 1%, in 2005 it was flat, and in 2004 it was up 2%. One has to go back to 2000 to find a year of double-digit revenue increases for radio.
Local revenue in 2008 fell 10%, national was down 12% and network business was flat. Yet off-air was up 7%, and RAB thinks that sector will grow to nearly $2 billion this year.
RAB’s Jeff Haley, seeking bright spots, said, “Major retailers in big box, QSRs [quick-service restaurants], supermarket and home improvement came on strong in Q4, as did accounts in the communications and insurance categories.”
On the political side, RAB said that in 35 markets that report advertiser detail to Miller, Kaplan, Arase & Co., local and national radio brought in $56 million in the fourth quarter and $108.3 million overall.
However, things were downright ugly in the auto sector, which careened downward 40% in the last quarter and 22% for the year.
“Virtually every advertiser in radio’s key revenue field curtailed local and national spending in Q4 ’08 … continuing a trend that had been developing over the previous three quarters — and the category did well to end the year off just 22%,” RAB stated.
And in what may not be seen as a blessing for those hoping for a quick turnaround, RAB added: “Despite the nearly universal cutbacks, automotive remains radio’s top advertising category in 2008, at $2.5 billion, representing approximately 15% of total radio revenue for the year.”