BIA/Kelsey Forecasts Radio Revenues To Rise 4.4%
Survey Shows Radio In The Mix For Successful Small And Medium Businesses
August 25, 2010 at 7:23 AM (PT)
The radio industry will see its over-the-air revenues in 2010 climb 4.4% over last year to $13.93 billion, with another $459.3 million in revenues coming from digital and online sources, according to a revised forecast issued today from BIA/KELSEY, adviser to companies in the local media space. This uptick, reported in the third edition of BIA/KELSEY's quarterly "Investing In Radio Market Report," comes from collective increases across the country in the various radio markets. Stations in top-10 market cities will average a 6.26% increase from 2009, while, notably, SAN FRANCISCO and PHILADELPHIA can expect overall revenue growth of 8% due primarily to an increase in spending by national advertisers.
Scattered cities in a number of markets will hit 7.5% or greater growth this year, including MIAMI-FT. LAUDERDALE-HOLLYWOOD (7.5%); DENVER (8.5%); SYRACUSE, LITTLE ROCK, and SPRINGFIELD, MA (8%) and NEW HAVEN (7.7%). Markets 11 to 25 will raise an average of 4.05%, while others will see average revenue increases of between 2.73% and 3.66%.
"We're glad to see positive growth in most U.S. radio markets, but still feel there remains enough uncertainty in the country's overall economic performance to tread carefully stepping into the second half of the year. Bear in mind, too, that the third and fourth quarters of 2009 were better than the first half of that year, so we do not expect the change to be that large by the end of this year," said BIA/KELSEY VP MARK FRATRIK. "Radio's performance this year will largely be driven by the success of the top markets; however, its impact will resonate to smaller ones."
Radio In The Mix For Successful Small And Medium Businesses
Higher-spending small and medium-sized business advertisers use 6.5 different media on average in their promotional mix -- including radio -- compared with 3.1 different media used by the broader SMB advertiser population, according to findings from the first wave of BIA/KELSEY's LCM: SMB Plus Spenders study.
Good news for broadcasters, as the survey found successful small and medium-sized businesses spend an appreciable amount of their total budget on broadcast media: 16.1% of their budget is allocated to broadcast media compared with 1.3% for all SMBs.
This survey is an extension of BIA/KELSEY's ongoing Local Commerce Monitor study conducted annually with research partner CONSTAT. The LCM: SMB Plus Spenders survey addresses a higher spending bracket of small and medium-sized businesses -- those spending at least $25,000 annually on media advertising and promotion. This is a considerably higher spending level than the core LCM population, which spends on average $2,000 to $3,000 annually on advertising.
"We launched this survey in response to the numerous inquiries from key players in the local, social and geo media space, who are seeking to better understand the behaviors and needs of higher-spending SMBs," said BIA/KELSEY Pres. NEAL POLACHEK.
Findings from the LCM: SMB Plus Spenders survey indicate these higher-spending SMBs:
* Have websites: A full 90% of SMB Plus Spenders have a website, versus 62% of core Local Commerce Monitor SMBs.
* Use more types of online media, and spend more for online advertising: In the past 12 months, Plus Spenders spent 26% of their total ad budget on online media, versus 21.8% for core LCM SMBs, a difference of 4.2 points.
* Spend an appreciable amount of their total budget on broadcast media: 16.1% of their budget is allocated to broadcast media compared with 1.3% for all SMBs.
* Focus on media performance in making media buying decisions: 40% rated "demonstration of ROI" as the first or second most important service that a vendor of online advertising can provide.
"SMB Plus Spenders are more performance-oriented in making their media purchase decisions and do a considerable amount of lead tracking," said BIA/KELSEY Research Dir. STEVE MARSHALL. "This group of SMBs, with its digital media savvy and use of more media categories, represents the sweet spot for many companies developing and delivering local advertising solutions."
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