US Radio Just Stays Positive In 2003
The US radio industry just managed to scrape a positive growth in 2003 advertising revenues, with the combined spend of the national, local and network categories showing a 1% rise over 2002.
During December, each of the categories reported a 2% rise. Similarly, the fourth quarter saw a 1% decline for all categories, hindered by early spending in the quarter, according to the RAB. This concurs with predictions made by Merrill Lynch. The broker says that some clients held off spending until 2004 to drive sales on a ‘clean slate’ and this resulted in a weak Q4 (see US Radio Revenues Weak In Q4 2003, Says Merrill Lynch).
Longer-term index To put the intermediate and long-term growth of the US radio industry into perspective, the RAB compares figures to sales in a base year – 1998 – which is indexed to 100.
The sales indexes for 2003 were: local, 135.4; national 144.0; and combined total, 138.4. The indexes for December were: local 121.5; national 125.8; and combined total, 122.9.
| US FY 2003 Radio Advertising Revenue Growth And Index Figures | |||
| December 2003 vs December 2002 | 2003 vs 2002 | ||
| Local Revenue | Â | Local Revenue | |
| All Markets | 2% | All Markets | 0% |
| Local Sales Index | 121.5 | Local Sales Index | 135.4 |
| National Revenue | Â | National Revenue | Â |
| All Markets | 2% | All Markets | 6% |
| National Sales Index | 125.8 | National Sales Index | 144.0 |
| Local & National Revenue | Â | Local & National Revenue | Â |
| All Markets | 2% | All Markets | 1% |
| Combined Sales Index | 122.9 | Combined Sales Index | 138.4 |
| Source: US RAB, February 2004 | |||
“The growth radio generated in 2003 points to healthy ad sales in all sectors, as consumer confidence grows and we move into a more stable economy in 2004,” says Gary Fries, president of the RAB. “In local advertising, which was the most lacklustre this past year, radio was able to maintain a presence without a shortfall. Combined with better-than-expected national results, radio is well positioned for accelerated momentum,” predicts Fries.
Merrill Lynch also anticipates an upswing in 2004, aided by expenditure around the Olympics and presidential elections. Analysts are forecasting a full-year growth of 8.1% for 2004, with a marked upturn coming towards the end of the year. This can be seen in the graph below.
| US Quarterly Radio Revenue Growth ($m) | ||
| 2004F | 2003 | |
| Jan | 2% | 6% |
| Feb | 3% | 7% |
| Mar | 9% | -2% |
| 1st Quarter | 5% | 4% |
| Apr | 7% | 1% |
| May | 7% | 0% |
| Jun | 7% | 4% |
| 2nd Quarter | 7% | 2% |
| Jul | 4% | 3% |
| Aug | 10% | 0% |
| Sep | 11% | 4% |
| 3rd Quarter | 8% | 2% |
| Oct | 11% | -1% |
| Nov | 14% | -4% |
| Dec | 9% | 2% |
| 4th Quarter | 11% | -1% |
| Full Year | 8% | 2% |
| Source: RAB and Merrill Lynch, January 2004 | ||
For a longer-term picture, the industry’s annual growth trends are shown in the graph below. This shows radio’s growth plotted with the growth rates of the overall US advertising market, which radio has generally outperformed.
In 2003, however, radio is likely to underperform the overall ad market, which is expected to grow by 4.1%, according to a consensus of recent forecasts compiled by MediaTelINSIGHT (for a breakdown of the figures click here).