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New York, New York – November 21, 2008 -- In the midst of this challenging economic climate, the financial picture for Radio had some bright spots.  Most notably, Radio operators’ strategic efforts to offset cutbacks in traditional advertising have paid dividends as Off-Air continues its steady growth with increases from online and experiential marketing. 

Preliminary Q3 reports indicate widespread year-to-year declines across media.  Commenting on Internet advertising’s flat Q3 results, David Silverman, a partner at PricewaterhouseCoopers LLP, stated that, “a weakening economy will continue to be a challenge for all forms of advertising-supported media.”

“Although Radio companies are not immune to the current economic downturn, Radio’s flexibility across traditional and emerging platforms provides advertisers multiple channels for consumer engagement,” observed Jeff Haley, President and Chief Executive Officer, Radio Advertising Bureau (RAB).  “By leveraging the strength of Radio’s on-air brands, advertisers can communicate with their customers in relevant environments.”

Network Radio saw consistency from Wal-Mart, Home Depot, and General Motors Corporate (including its divisions), with Wal-Mart taking the lead as the sector’s top spending advertiser with nearly $42.7 million invested through Q3 ‘08. 

With their own bottom lines reduced, most marketers curtailed spending across media.  Radio did experience growth in certain key categories, particularly Insurance and Restaurants, in the Local and National sectors.

The extended Political season for the 2008 Presidential race proved beneficial to Radio.  In the 35 markets that report advertiser detail to Miller, Kaplan, Arase & Co., campaigns on Local and National Radio carried some $20.6 million of messages in Q3.  It moved the year-to-date tally to $54.9 million – spending which offset the drops among many of Radio’s perennial leading spenders.  In addition, Network Radio was endorsed by the political hype with $6.2 million in Q3 ’08 and $13.8 million year-to-date according to TNS Media Intelligence.

Political Spending Analysis

The 44th president will be inaugurated into office soon, following one of the most historic presidential races.  Here’s a recap of Political spending. In a comparison of Local and National Q3 and year-to-date ’08 political spending in the Miller Kaplan markets to the last presidential election year of 2004: Q3 ’08 saw a 20.5% increase versus Q3 ’04 (+$3.5 million) Year-to-date ’08 tallied in a 43% increase over the same time period from ’04 (+$16.6 million)

Also in the Local and National sectors, Issue/527s won the quarter as the largest spender infusing more than $2.7 million dollars with year-to-date ending over $7.8M in the 35 Miller Kaplan reporting markets:

• Various committees, associations and organizations followed with a $.7M and $2.2M investment in National and Local Radio’s Q3 and year-to-date totals, respectively
• Candidate dollars, led by Barack Obama and followed by John McCain, collectively added $.2M to Q3 ’08, closing out year-to-date at $1.2M
• The bulk of all political funds was spent in the West region in Q3 ’08 (42%) and year-to-date (47%)
• Additional political quarterly and year-to-date breakouts:
• Central – 23%; 21%
• East – 18%; 19%
• South – 11%; 10%
• Southwest – 5%; 3%

According to TNS, Q3 ’08 Network Radio was supported by T. Boone Pickens’ Plan ($1.4M), Obama for President ($1.0M), research and educational think tank, Heritage Foundation ($0.4M), along with Issue/527 and various organization spend.

*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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