BIA/Kelsey Revises Radio Industry Revenue Estimates for 2011 and 2012

New Outlook

With economic concerns affecting advertising spending across all local media, the radio industry has experienced only a marginal increase in over-the-air revenues in 2011, ending the year with projected revenues of $14.1 billion, a 1.2% increase over 2010, notes BIA/KELSEY in its revised estimate. The industry realized increases in digital/online revenues and will end the year at $479 million, a 15% increase over 2010.

In the fourth edition of BIA/KELSEY's quarterly "Investing In Radio Market Report," the company also reports the number of transactions was down slightly, 0.2%, but the value of these station sales increased noticeably.

"It’s been a year of nominal growth for the radio industry, as advertisers remain cautious about spending their ad dollars in this sluggish economy," said VP MARK FRATRIK. "On the upside, the radio industry has maintained its value, both from a dollar and sales volume perspective. Sales across the country have been steady and the total value of sales has increased to over $4.2 billion through OCTOBER. All of this together underscores radio’s continuing ability to effectively reach and monetize local audiences via its proven business model. This is a positive situation considering the considerable dollars at stake during next year’s election."

Looking ahead to 2015, the "Investing In Radio Market Report" forecasts radio revenues to grow a moderate 3.5% in 2012, due to the election year and the continued growth of the online/digital segment. Radio's online/digital revenues will grow to $479 million in 2011, up from $405 million in 2010. The five-year outlook indicates radio’s online/digital revenues will reach $758 million by 2015, representing a 13.4% compound annual growth rate.

FRATRIK highlighted the industry's continuing integration of digital and traditional assets, which is giving stations opportunities to attract advertisers through online, social media and mobile channels and drive on-air audiences online. In particular, stations have been launching deals into their offerings.

"Local radio stations are a natural participant in the deals space. We’ve been told that you can literally see the sales meter jump when there is an on-air mention of a deal," said VP PETER KRASILOVSKY. "Stations typically participate in deals with links to their websites, or in partnership with other deals sites."

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