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New York, New York – August 21, 2008 -- Underscoring Radio’s ability to adapt to changing media patterns, Off-Air revenue has surpassed last year’s mid-year forecast by the Radio Advertising Bureau (RAB) and is expected to approach $2B by the end of 2008 – nearly a full year ahead of the predicted timeline.

 

Exceeding expectations that were based on a compounded annual growth rate (CAGR) of 10% from June, 2005 to June, 2007, Off-Air activity surged in late 2007 and has been increasing at a CAGR of 12.3% over the past two years.  The sector outperformed the projection and is on the fast track to pass $2B in 2009.

“Radio’s off-air platforms are realizing prosperity similar to that of other alternative forms of advertising,” observed Jeff Haley, President and Chief Executive Officer of RAB, who had made the initial prediction.  “The industry’s investment in new technology and digital distribution channels has extended Radio to the Internet, mobile phones, navigation systems, and more.  Combined with an enhanced on-air product and on-site experiential marketing, the result is a 360-degree experience for consumers with multiple touch point opportunities for advertisers.”

At 9% of Radio’s total revenue, Off-Air is comprised primarily of online activity, followed closely by experiential marketing partnerships.

 

Revenue Comparisons - 2008 vs. 2007
(In Millions)
Revenue	$Q2 '08	% Chg	$1st Half  '08	% Chg
Local	$      3,792	-7%	$          6,978	-6%
National	$         778	-11%	$          1,428	-11%
Local & National Combined	$      4,570	-8%	$          8,406	-7%
Network	$         293	0%	$             567	3%
Off-Air	$         501	10%	$             889	12%
Grand Total	$      5,364	-6%	$          9,862	-5%
Source: Miller, Kaplan, Arase & Co.*
Off-Air was previously referred to as Non-Spot

 

In the Local and National sectors, Radio’s Q2 and year-to-date revenue revealed a number of well-performing areas even as total media spending cutbacks in key categories impacted Radio’s bottom line.

 

On a year-to-date basis, Political advertisers who elected to use Radio contributed a welcome infusion of dollars. Insurance advertisers made sure they covered Radio’s airwaves, increasing spending by an impressive 21.6%.  Professional Services spending also grew significantly, up 18.3%.  The Department/Discount Stores/Shopping Centers added more Radio to their carts, up 10.2%, while the Beverage category added some fizz with a 7.6% increase. 

 

Radio's Combined Local and National Leading Growth Categories
2008 vs. 2007
Category	Q2 '08     (millions)	Q2 '07       (millions)	% Change	1st Half '08 (millions)	1st Half '07 (millions)	% Change
Insurance Companies	$231.8	$198.4	17%	$421.8	$346.8	22%
Dept/Disc. Stores/Shop. Ctrs.	$159.0	$142.4	12%	$283.2	$256.9	10%
Professional Services	$84.6	$76.2	10%	$264.6	$223.6	18%
Source: Miller, Kaplan, Arase & Co.:X-Ray Markets
(Extrapolated dollar amounts based on the 35 market X-Ray pool may not be fully indicative of industry results as a whole.)

 

Traditional top-spending industries hard hit by the economy include Automotive, Financial Services, Home Furnishings/Floor Coverings, and Home Improvement Stores.  The Communications/Cellular/ Utilities sector has been slowed down by market saturation (90%+ penetration), and customers not as willing to trade up to new equipment.  Residual fallout from the writers’ strike curtailed spending by TV Networks/Cable Providers.

*Local, National, 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 U.S.   The methodology to derive the 2007 local, national, and Off-Air (non-spot) quarterly dollar amounts has been recalibrated and maintains previously reported quarterly total revenue while reflecting a shift in the dollars within the sectors.  Network Revenue includes the top five Radio network companies.  Non-Spot data has been collected and verified since January of 2002, and reported since September of 2004.

 

The RAB began reporting quarterly Radio revenue in dollar amounts with the 2007 results.  The Radio Advertising Bureau serves more than 6,000 member Radio stations in the U.S. and over 1,000 member networks, representative firms, broadcast vendors, and international organizations. RAB leads and participates in educational, research, sales, and advocacy programs that promote and advance Radio as a primary advertising medium.  

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