Katz: Radio Ad Revenue Continues To Rise

Bearer Of Good Tidings

KATZ MEDIA CEO STU OLDS just sent out an e-mail that reaffirms a "robust" growth in radio ad revenue. Radio, which finished JANUARY up 26%, and is pacing 11% higher in FEBRUARY and 13% up in MARCH. Overall, the first quarter is pacing up 19%.

While 2009 comparisons are favorable, the strength of this turnaround -- which started in DECEMBER 2009 (+16%) -- is driven by broad-based category support, tightening marketplaces pushing up pricing and radio’s rediscovered value in the marketing mix," OLDS wrote.

Seven categories, which account for 87% of total National Spot Radio spending, are up in the first quarter. They are:

Retail +7.6
Finance +8.7
Entertainment +36.4
Auto +35.6
Telecom +22.5
Consumer Products +34.9
Prof. Services +21.5

"This broad-based category lift translates into strong pacing in every market segment and in every region of the country,: he noted. "In fact, all top-25 markets are pacing ahead of last year, with 78 of the top 100 ahead of last year’s first quarter."

One look at the Pacing By Market Groupings reveals that the turnaround can be seen in all regions of the country.

GROWTH IN MARKETS, Q1 2010 (%)

1-10 -- 26.7
11-25 -- 22.3
26-50 -- 6.3
51-75 -- 16.7
76-100 -- 7.0
100+ -- 19.8

GROWTH IN GROUPINGS BY REGION (%)

North Central -- 18.6%
Northeast -- 37.4%
South Central -- 19.0%
Southeast -- 17.6%
West -- 11.4%

Pricing Moving Up

The widespread recovery is fueling a higher demand on inventory, which is pushing pricing up and reducing the number of no-charge and low-charge spots, causing near sold-out conditions in selected markets for mid-FEBRUARY.

"First-quarter no-charge spots, as a percentage of sold inventories, are down 13%," OLDS wrote. "As pricing is moving ahead of last year, we need to make sure our customers know that demand is moving pricing up and early placement is becoming increasingly important. We want agencies and advertisers to be in a position to plan for this more positive environment.

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