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U.S. Radio Revenue Fell 18% in 2009

By at least one measure it was radio's worst year in modern times; but RAB is encouraged by trends it saw at end of the year

The year 2009 brought lousy revenue numbers for U.S. commercial radio revenue. But if “flat is the new up,” business leaders perhaps can take heart from trends at the end of the year.

In revenue figures released at the end of last week, the Radio Advertising Bureau said December sales for U.S. commercial radio were flat compared to a year ago, which given the recent environment constitutes “a tremendous lead-in to 2010,” according to President/CEO Jeff Haley.

However, radio revenue for all of 2009 fell 18%; RAB estimates grand total revenue last year at about $16 billion. According to Radio World’s records of past RAB reports, this constitutes the biggest decline in recent memory, certainly since at least 1980. The previous largest drop in those 29 years came just last year, when revenue fell 9%. (Prior to 1980, RAB’s numbers in RW’s records are not broken out year by year. It may in fact have been much longer since commercial radio has seen a year like last year’s.)

The 18% drop last year includes declines of 20% for local radio (which still accounts for two-thirds of radio’s revenue), 19% for national and 9% for network. Off-air (non-spot) revenue also was off 9%; the only growth category for the year was “digital,” meaning revenue from station Web sites; that statistic was up 13%. RAB uses data from Miller, Kaplan, Arase & Co.

But RAB finds happier news among recent trends. It said results for the fourth quarter of 2009 confirm “encouraging signs that emerged” earlier in the year. Or as Haley puts it: “The green shoots that we saw earlier have fully taken root.”

“Key radio categories such as automotive, grocery and financial services all posted increases in Q4 spending, and communications and restaurants were at 90% and 95% of Q4 ’08 comps, respectively,” it stated. “At the same time, advertisers’ increasing interest in radio’s digital capabilities generated the biggest gain of any quarter since we began breaking this segment out separately, up 15%. Combined, these factors brought Q4 revenue totals to 92% of the same period last year.”

RAB made note of automotive spending. “This industry has been a leading indicator of the direction of consumer sentiment and the economy,” it stated. “Propelled by a 9% increase in Q4 spending over Q4 ’08, automotive regained its long-standing place as radio’s top local/national advertiser-spending category for the quarter and for full-year 2009.”