Radio is on the Road to Recovery

by | 2 minute read

One form of traditional media is in the midst of a comeback. More businesses turned to radio advertising last year to get their message out to consumers. And radio station owners are expecting a big revenue increase in 2012, primarily because of the presidential election.

The Radio Advertising Bureau has announced that 2011 industry revenue reached  $17.4 billion. This was a 1% increase over the previous year’s level. While this is the right trend as far as radio broadcasters are concerned, they have a ways to go before they return to the market peak of $21.3 billion. That level was reached in 2007.

The revenue picture for radio breaks out like this:

  • Spot $14.06 billion (-1%)
  • Network $1.136 billion (+3%)
  • Digital $709 million (+15%)
  • Off-Air $1.491 billion (+1%)

Increases in demand for radio are most noticeable from the following industries:

  • Auto Dealers/Dealer Groups/Manufacturers +5%
  • Insurance +26%
  • Beverages +6%
  • TV/Network/Cable Providers +6%

The auto industry, which has returned in a big way,  accounts for 10.9% of radio spending. Expenditures by specific manufacturers broke out as follows last year and may be even higher this year:

  •  Chrysler Group $199.2 million
  • Toyota Dealers $133.4 million
  • Chevrolet Dealers $66.1 million
  • Ford Dealers $54.9 million
  • Ford Motor Corp. $60.8 million

This year, large broadcasters will likely continue to sign on more national ads. And, of the $5.6 billion that will be spent on political campaigning, radio will be in line for about 7% of this spending or $392 million.

Spending in the food category was up 5% last year, and reached $1.4 billion. This includes restaurants, grocery stores and c-stores who are all competing for the consumer’s food dollars.

The communications and mobile phone industry is still in the growth phase of its life cycle. As a result, vendors are aggressively marketing in all media formats and this includes radio.

[Sources: Sisario, Ben. Radio Ads Are Coming Back. 19 Feb. 2012. Web. 5 Mar. 2012; Total Radio Revenue. 20 Feb. 2012. Web. 5 Mar. 2012; Second Consecutive Year of Growth. 17 Feb. 2012. Web. 5 Mar. 2012]
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-owner of several small businesses in the health care services sector.
March 5, 2012 Media Usage Tags: , ,