Non-Spot Radio Revenue a Bright Spot in ’07; Likely to Reach $1.5B in ’08

Non-spot radio revenue had double-digit gains of 16% in the second quarter and 12% in the first half of 2007, compared with the respective year-earlier periods, helping to offset dips in other segments and keeping total radio spending flat, the Radio Advertising Bureau (RAB) reports (via B-to-B).

 

“The average monthly non-spot revenue growth rate for the last two years has been 10%,” said Jeff Haley, president and CEO of RAB. “At this rate, non-spot revenue will be over $1.5B for 2008 and approach $2B by the end of 2009.”

Non-spot dollars account for 7.2% of 2Q and 6.8% of 1HO7 revenue, underscoring the increasing importance of this revenue stream to Radio’s bottom line, according to RAB.

“The majority of non-spot revenue is coming from stations’ online efforts, and we expect this to continue accelerating as more and more stations expand their online offerings,” Haley said.

Several advertiser categories – key spenders in the first half – outpaced overall radio spending growth in 2Q07, according to RAB:

• Communications: Spending grew 17.0% in 1H07 from the year-earlier period.

• Insurance: In Q2, spending gains were 13.7%, and 1.9% in the first half of the year.
• Professional services: Spending increased 7.3% year-to-date.
• Concerts/theaters/movies: Radio’s take was up 10.8% in 1H07.

Automotive-category data released by RAB:

• Automotive remains radio’s biggest advertiser category, with spending by the automotive category’s top 25 advertisers driven by hefty investments from American-model manufacturers and dealers, up 18.0% and 7.6%, respectively, through the first six months of 2007.
• Domestic nameplates were also the bigger category spenders in second quarter as well, with domestic dealers registering a 4.6% increase and domestic manufacturers up 3.8%, outperforming the total top 25 automotive advertisers (-3.9%) and the category as a whole (-7.3%).
• Through the first half of 2007, Toyota Dealer Association was the top automotive advertiser, outspending the number two advertiser in the category by 47%.
• The Top 25 automotive-category spenders for the first half :