Katz Sees National Spot Radio Market Stable In 2011, Heading Higher In 2012

Mark Gray Headed Report

KATZ RADIO GROUP has released their National Spot Radio Market Update. In it, they write "The national spot radio market is posting gains for the full year amid glimpses of a stabilizing U.S. economy. We're also seeing positive trends for 2012, which will be bolstered by what’s expected to be a record year in political advertising."

The national spot radio market is up 3.1% for full year 2011 over last year, although pacings have slipped 2.6% in this year's final quarter compared to the same period a year ago (excluding political spending). KATZ is also seeing a positive start for 2012, with pacings up single-digits in the year’s first two months and solid demand from national advertisers.

"Radio remains an exceptionally strong medium as it continues to reach nine out of ten people in every demographic segment each week," writes KATZ. "More people of all ages are listening to radio because it connects with listeners in ways no other medium can match. On an average day, 70% more adults age 18-34 will listen to radio than will use FACEBOOK, and radio remains the primary source of music discovery for people of all ages. Radio listening levels, especially among young people, have remained remarkably consistent over the past three years even as use of online and mobile listening has grown, providing radio with a growing new revenue stream."

Core Category Support

Core advertising categories are showing mixed results. In the fourth quarter, the fast food, professional services, retail and finance categories are showing gains, but natural disasters in ASIA earlier this year, including the tsunami that devastated parts of JAPAN, caused ripple effects through the auto sector and resulted in vehicle production delays. The report notes automakers expect to bring production -- and advertising -- levels back by the end of this or early next year.

As expected, political spending is down significantly from 2010's active election season, "but a hotly contested presidential campaign and scores of contentious congressional races in key states will result in a strong rebound in 2012," adds KATZ. "Issue advertising focused on education, energy and the economy should also place additional pressure on inventory and make a positive contribution to radio's bottom line."

Leading Q4 2011 Advertisers

Following an extremely strong year in 2010, the report says KATZ is "excited by the number of national advertisers that maintained healthy radio budgets this year. In fact, about 92% of 2010's national advertisers returned to radio in 2011, with many significantly increasing their ad budgets. For example, retailers such as WALMART, telecommunications companies like COMCAST, and insurers including ALLSTATE and AMERICAN FAMILY INSURANCE all increased their radio budgets by double-digit percentages.

The Largest Individual Advertisers Within Each Core Category For The Fourth Quarter 

Retail: WALMART, SEARS, SAFEWAY, SUPERVALU, TARGET, KOHL'S, JOSEPH A BANK, ALDI, HOME DEPOT LOWE'S STAPLES, MATTRESS FIRM

Automotive: DODGE, CHRYSLER, O’REILLY AUTO PARTS, BP, JEEP, TOYOTA, CHEVRON, HYUNDAI, AUTOZONE, MERCEDES, HESS

Finance: ALLSTATE, GEICO, AMERICAN FAMILY INSURANCE, STATE FARM, JP MORGAN CHASE, AMERICAN EXPRESS, NAVY FEDERAL CREDIT

Telecomm/Utilities: VERIZON, US CELLULAR, COMCAST, T-MOBILE, CRICKET COMMUNICATION, AT&T, TRACFONE, CENTURYLINK

Fast Food: BURGER KING, PANERA, CRACKER BARREL, BUFFALO WILD WINGS, BONEFISH, SONIC, JIMMY JOHNS GOURMET, TACO BELL

Professional Services: KAISER PERMANENTE, PORTFOLIO MEDIA MGMT, ACE CASH EXPRESS, CEPHALON, US DEPT OF VETERAN AFFAIRS, U.S. MARINE CORP

Entertainment: FOX BROADCASTING, ESPN, ABC, PARAMOUNT PICTURES, NBC, WALT DISNEY STUDIOS, HALF PRICE BOOKS, SUMMIT, STARZ

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