Local TV/Radio Advertising to Rise

After a big growth year in special event revenue from politics and the Olympics, TV and radio stations are back to focusing on fundamentals.  Analysts foresee growth in demand from core marketers for these media formats in 2011. Providers of these traditional media platforms are repositioning themselves for a bigger market in 2012 and they'll also be using 2011 to merge, acquire and consolidate.

Wells Fargo Securities bond analysts Bishop Cheen and Davis Hebert are looking for local radio to see a 2–3% revenue increase over last year. In 2011, that would bring radio media sales to a $17.3 billion revenue level.  The analysts believe the lack of political advertising in 2011 will put radio stations in a weaker position compared to TV and outdoor this year.  But the national spot radio market is starting out 2011 with impressive numbers. Spending by core marketers in the automotive, financial services, consumer products and professional services is up compared to last year. At the same time, industry watchers believe the improved economy and credit market will bring about more mergers and acquisitions this year in radio.

Cheen and Hebert report that local TV stations can expect a ‘low- to mid-single digit’ growth rate in 2011. The core market typically brings in at least 75% of revenue at most stations. That means operators will be relying on auto companies, telecom firms, and other retailers to buy inventory. For TV, the analysts say the recovery is ‘firmly in place.’ As with radio, the TV industry will see merger and acquisition this year. And the new valuations, post-recession, will shed light on what investors think these properties are worth as they compete with the increasingly popular new media platforms.

[Sources: Bond analysts see modest growth for radio in 2011. RBR​.com. 25 Jan. 2011. National Spot Radio Up 17.7% in 2010. RBR​.com. 8 Feb. 2011. Local TV Growth Projected for 2011. RBR. 31 Jan. 2011]
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.