Network radio bucking trend

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Network radio is undergoing a renaissance. At a time when the economy is squeezing local advertisers and local media, the medium -- with its attractive efficiencies, targeted reach and greater accountability -- is thriving.

Up 4% in 2007 to $1.2 billion, the health of network radio stands in stark contrast to the rest of the on-air radio business, which declined 3% to $18.5 billion. Net radio is nearly sold out through May, buoyed by retail, financial services, telecommunications and cable and TV tune-ins. "It is a sort of hot new medium," said Maja Mijatovic, director of national radio at Horizon Media.

For such national advertisers as Home Depot, Sears, Wal-Mart and other retailers consolidating local brands into national ones, network radio's economics make a lot of sense.

"There are a lot of big-box retailers who have decided to use the efficiencies of the medium and make it part of their mix. When you start aggregating (in spot), there is a point of diminishing returns," said Jamie Bartholomew, vp and director of radio at Initiative.

Mergers in such key industries as retail and banking aren't the only reason the medium is bucking the generally downward trend in radio. During the past few years, such players as ABC Radio Networks, Premiere Radio Networks, Dial-Global and Westwood One have worked to make the medium more flexible, offering copy splits down to the station level with quicker turnaround and as fast as four days for many networks. Although most splits are regional, one recent campaign had 83 copy splits.

"Network radio can almost behave like a local buy," said Agnes Lukasewych, senior vp and group account director of radio at MPG. "The more flexibility the networks can provide, the more advertisers will continue to stay in."

Then there's the accountability factor. While not recognized broadly, net radio has the only ratings service that reports audiences to cleared commercials. In May, Arbitron will release its first quarterly spot-confirmation report, adding more frequent verification of cleared spots. Overall, 90% of commercials are cleared by the network's stations.

"The TV industry is talking about commercial ratings, but RADAR (Arbitron's network radio ratings service) has used that metric for years," said Irene Katsnelson, senior vp and director of net radio at Universal McCann.

"For local radio stations to grab more national business, they need to do a better job. Their compliance has to be better," said Barry Berman, president of CRN Radio. "There isn't a client service mentality at the local level, and the networks are waking up to it."
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