Radio Slumps 22% in Q2; Digital Continues to Grow

August 25, 2009

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Local and national radio ad revenue sank 25% in the second quarter of 2009, to $3.4 billion, per the Radio Advertising Bureau. Local and national combined were also down 25% for the half.Local was down 25% and national was down 24% for the quarter; each was down 25% for the half. Off-air sank 13% for the quarter and the half. Network radio was down 10% and 11% for the quarter and the half, respectively.

Digital radio (reported separately from off-air beginning in 2009) was up 9% for the quarter and 10% for the half, showing an improvement in the market.

Total radio revenue was down 22% for the quarter and 23% for the half.

Despite the continued slump in overall revenue, the RAB says Q2 results show increasing signs of an improving economy. “We are most likely past the Q1 low point for radio revenues and are now on the rebound,” stated Jeff Haley, president and CEO of the RAB. Much of radio’s weakness in Q2 and for the first six months of 2009 is linked to marketers associated with the auto industry (formerly radio’s top ad category, now #3) and major retailers feeling the impact of shaky consumer confidence and spending.

The RAB says that some advertisers, previously unable to compete against category leaders, are taking advantage of a chance to increase share and position within the market. Such moves are visible across various reporting categories, including Restaurants, Communications, and Automotive, particularly Imports. Among local and national advertisers leading the charge are Subway, Dunkin Donuts, Boost Mobile, US Cellular, Metro PCS, Mitsubishi, Volvo and Honda Motor Corporations.

The 22% drop for the quarter followed a 24% slump in the first quarter. National and local ad spending combined was down 26%, while network radio was down 13%.


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