US Radio Update From Merrill Lynch
Following a less than impressive second quarter, analysts have revised their outlook for US radio advertising and growth in this sector is predicted to be less than originally envisaged.
The US Radio Advertising Bureau (RAB) has foreseen a “strong, consistent recovery” in the second half of the year but external observers are more cautious. In its latest analysis, Merrill has reduced its growth estimates for Q3 and Q4 from 4.3% in both cases to 2.7% and 3.3% respectively.
While there are signs of improvement at competing broadcast media, such as broadcast and cable TV networks, radio is yet to see much of a revival. This is put down to the the medium’s shorter lead-time and easier cancellation policy.
As a result of the latest revision, Merrill has cut its 2003 growth forecast for radio from 3.3% to 2.7%. A successful upfront TV market should trickle down to radio advertising this autumn but business is unlikely to return to its pre-war level until 2004. The industry is set to benefit from CPM price increases and relatively easy comparisons in the first half and full year growth in excess of 8% remains a distinct possibility.
| US Radio Advertising Growth Revisions | ||
| Previous | New | |
| January | 6.0 | |
| February | 7.0 | |
| March | -2.0 | |
| Q1 2003 | 4.0 | |
| April | 1.0 | |
| May | 0.0 | |
| June | 2.0 | |
| Q2 2003 | 1.1 | |
| July | 4.0 | 2.0 |
| August | 6.0 | 3.0 |
| September | 3.0 | 3.0 |
| Q3 2003 | 4.3 | 2.7 |
| October | 3.0 | 3.0 |
| November | 4.0 | 3.0 |
| December | 5.0 | 4.0 |
| Q4 2003 | 4.3 | 3.3 |
| FY 2003 | 3.3 | 2.7 |
| FY 2004 | 8.1 | 8.1 |
| Source: US RAB/Merrill Lynch, July 2003 | ||
