Radio Revenue Growth Slows to 1% in Second Quarter as Comcast Becomes Biggest Spot Advertiser
NEW YORK – The radio industry saw slower revenue growth of 1 percent in the second quarter after a 3 percent gain in the first, marking its sixth consecutive quarter of improvement, the Radio Advertising Bureau said Friday.
The 1 percent improvement in the latest quarter to $4.58 billion was driven by a 29 percent jump in insurance industry advertising spending and strong gains in TV/cable provider, financial and beverage ads, leaving the first half of 2011 up 2 percent from the year-ago period at $8.36 billion.
Cable giant Comcast became the biggest spot radio advertiser in the latest period, with its cable systems business spending $91.7 million, up 58 percent over the same period in 2010, the organization said. It was followed by McDonald's and AT&T. The RAB also highlighted big spending increases during the second quarter and first half at various parts of entertainment giant NBCUniversal, which Comcast now controls.
The NBC broadcast network increased spending by 360 percent to $24.4 million in the second quarter, the RAB said.
For the first half, Comcast Cable radio ad spending rose 46 percent to $175.5 million, and NBC spending increased 16 percent to $41.2 million. NBCUniversal’s USA Network spent $31.8 million in the first six months of the year, up 80 percent from the year-ago period. The company’s Universal Pictures, which has had such hits as Hop, Fast Five and Bridesmaids this year, spent 38 percent more in the first half, according to the RAB, which didn’t disclose a dollar figure though.
January-June radio revenue growth was also driven by auto and retail ad spending, according to the RAB.
After three years of declines, the radio industry returned to revenue growth last year – with a 6 percent gain - as an improving economy, elections and rebounding automakers boosted momentum. But this year, growth momentum has slowed.
"It’s clear that the diversified revenue mix radio broadcasters have created is paying off in a static spot environment,” said RAB president and CEO Jeff Haley. "Contrary to what you might think regarding recent market woes, many of the nation’s largest marketers are forecasting increases in media expenditures through the end of 2011. Companies like P&G, AT&T and Coca-Cola have all reported upcoming campaign support for various products and Fiat is reintroducing its vehicles to the U.S. – all which could mean more revenue for radio."
Radio's top five ad revenue categories in the second quarter of 2011 based on spot spending were communications/cellular ($341 million), auto dealers/manufacturers ($330 million), restaurants ($317 million), television/networks/cable providers ($305 million), and beverages ($270 million).