Radio is on the Road to Recovery

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. NYTimes​.com. 19 Feb. 2012. Web. 5 Mar. 2012; Total Radio Revenue. Radioink​.com. 20 Feb. 2012. Web. 5 Mar. 2012; Second Consecutive Year of Growth. RAB​.com. 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.