Radio Revenues Inched Up in 2011

February 21, 2012

rab-radio-revenues-2009-11-feb-12.jpgRadio revenues edged up in 2011, finishing the year at $17.4 billion, up about 0.6% from $17.3 billion in 2010, according to [pdf] a February 2012 report from the Radio Advertising Bureau (RAB). Overall growth was driven by spot momentum through the first 3 quarters, 15% year-over-year growth in digital, and healthy performance in off-air (+7%) and network (+3%). The latter 3 sectors also performed well in Q4, rising 8%, 6%, and 5% respectively to offset a 4% drop in spot revenues. Overall, revenue was down 2% year-over-year in Q4 after growing for 7 consecutive quarters.

Auto Still Largest Spender

The automotive category was the largest spender in 2011, accounting for 26% share of spending by the top 5 ad categories, up from 24% in 2010. After that, the communications, restaurants, and TV/networks/cable categories all took a 19% share of spending by the top 5, with the financial category accounting for 17%.

Spending by the automotive category grew 5% in 2011 to almost $2 billion. Chrysler Group dominated the category with $199.2 million in spending, representing 10% of total volume in the category, also topping the Q4 spending with $55.7 million. Ford and GM took the top 2 spots respectively in both Q4 and 2011 within the network radio sector, although Chrysler Group showed the largest growth, jumping 339% in 2011.

Meanwhile, insurance companies were the top growth category in Q4 and year-over-year, up 23% and 26%, respectively. Three advertisers – Allstate, Geico, and State Farm – spent over $100 million in 2011. In 2010, Geico was the only advertiser to do so. The insurer certainly seems to have kept up its advertising activity this year: according to data released in February 2012 by MediaGuide, Geico was the top brand advertised on radio in January 2012, with 272,511 plays, almost double the next brand, McDonald’s, which had 142,716 plays.

Political Ad Spending Boosts Revenues

Data from the RAB report indicates that political ad spending reached $5 million in Q4, and $18.4 million in total for 2011. Candidate spending accounted for 26% of Q4 spending and 17% of overall spending for the year. Spending from various organizations and committees had the greatest impact, making up half of the total political ad spend for the quarter, and 59% for the year.

Other Findings:

  • AT&T was the leading advertiser on spot radio in 2011, spending $364.9 million.
  • Within the department and discount stores retail sub-category, growth across spot airwaves was up 11% for Q4, and 5% for 2011. Sears and Target both spent more in Q4 than in the first 3 quarters combined. Sears was the Q4 leader at $58.7 million, followed by Target, at $52 million. For the year, though, Walmart was the biggest spender, at $150.2 million.
  • The beverage category rose 6% in 2011 to spend $899 million across spot airwaves. Anheuser-Busch increased Q4 spending by 12% to $33.5 million, and year-end by 1% to $131 million, making them #1 and #2 respectively within the category. A list, per MediaGuide data, of the top 10 beer and malt beverages advertised on radio in January 2012 by number of ad plays can be found here.

About the Data: RAB’s Spot Radio, Digital and Off-Air revenues are based on a pool of more than 100 markets as reported by the accounting firm of Miller, Kaplan, Arase & Co. and extrapolated to the entire US. Digital Revenue is comprised from activity generated by websites, Internet/web streaming and HD Radio including HD2 and HD3 stations. Network Revenue includes the top five Radio network companies.

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