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Radio Revenue Holds Its Own

The industry didn’t keep up with prior year’s growth pace yet managed a positive return

“Digital” revenue accounts for a small piece — about 4% — of the money U.S. commercial radio companies bring in. But it’s the sector that’s growing fastest.

Digital means websites, online streaming and HD Radio including HD2 and HD3 stations. With a push from those sources as well as other off-air revenue, the U.S. commercial radio industry posted revenue growth for the year 2011 — though just barely. According to the Radio Advertising Bureau, revenue was up 1% over 2010, to $17.4 billion.

Thus the industry is able to say it has grown for two years in a row now. Revenue the prior year was up 6%, according to RW’s past reporting; and that followed a six-year period of mostly flat-to-down years (including a grim 18% drop in 2009). U.S. commercial radio however is still well off the peak number of $21.7 billion that RAB reported in 2006.

“A year-end spending increase of 5% by three of the top five categories, combined with the contribution of digital and off-air to radio’s bottom line, buoyed radio during the uncertain environment that existed in 2011,” stated RAB President/CEO Jeff Haley.

For the year, radio spot revenue actually fell 1%; but the grand total was picked up by 3% growth in the network category, 15% in “digital” and 7% in off-air. While growing, digital revenue was still only $709 million.

Haley said that while the automotive category remains the dominant one, “the categories ranked #2 to #5 have grown closer to each other compared to 2007 levels and now represent a larger percent of the overall pie.” Those categories are communications, restaurants, TV/networks/cable and financials.

AT&T, McDonald’s and Comcast Cable were the largest radio spenders.

But if you listen to radio, it’ll be no surprise that insurance was the fastest-growing category, up 26% for the year.

“Three advertisers (Allstate, GEICO and State Farm) in this category spent over $100 million in 2011 [in] radio compared to just one — GEICO — in 2010,” RAB reported.