Una lunga analisi di Katy Bachman, di Mediaweek sulle (grigie) prospettive del mezzo pubblicitario radiofonico negli Stati Uniti. Solo negli anni Cinquanta, con la guerra in Corea e il primo boom televisivo, c'erano state tante difficoltà. Ma con un po' di inventiva...
Forecast '08: Radio
Katy Bachman
DECEMBER 31, 2007
The last thing the radio industry needs after seven years of slow-to-no growth is to get slammed with the local ad slowdown predicted for 2008. Dependent on local advertising for 80 percent of its revenue, the industry will need to pull out all the stops in order to offset forecasted declines of flat to down 2 percent, say experts. “Local media are more economically sensitive to retail sales and consumer spending—the ultimate cash register effect,” says Jon Swallen, senior vp, research at TNS Media Intelligence. “Retail sales growth has been slowing.
It’s at its lowest growth rate in three to four years. A couple of key categories—auto, home-related categories—are all in the dumps right now, and that’s affecting the volume of ad spend.”
As 2007 draws to a close, analysts have readjusted downward radio’s year-end forecast, to negative 2 percent growth. For the first time since 2002, radio revenue could slip below $20 billion excluding nonspot sales, per SNL Kagan.
Never has the industry had such a tough stretch. In fact, these are the worst times since the 1950s, when radio faced the triple whammy of an economic recession, the Korean War and the advent of the new medium of television. “The big picture is discouraging. If 2008 doesn’t pull some surprises, an eighth straight slow-to-no-growth year looms,” says Jim Boyle, analyst at CL King & Associates. “Not enough larger groups are changing much to stem audience erosion or ad share attrition or to prop up rate card discipline and surmount the biggest problem: weak advertiser demand.”
To turn around business, radio has several initiatives in the pipeline. The industry’s aggressive forays online most likely hold the best hope. Stations’ online intake in 2007 made up more than half of their nontraditional revenue, a trend likely to continue in 2008. “The smartest operators are looking to develop programs for marketers that deliver audio content wherever they want it, putting audio into a number of distribution channels,” says Jeff Haley, president and CEO of the Radio Advertising Bureau, which forecasts radio revenue will be flat in 2008.
Lee Westerfield, analyst at BMO Capital Markets, estimates that three percent to five percent of radio revenue (or $640 million to $1 billion) is generated by online ad sales.
“Radio is about to go through a huge renaissance,” predicts a bullish David Goodman, president of marketing at CBS Radio, which, according to the exec, has doubled online revenue each of the last three years.
As they intensify their Web presence, stations also are expected to expand into mobile and HD in 2008.
Still, much work remains to salvage the core business. To that end, the industry has, for the first time, made an aggressive push for political ad bucks. PQ Media estimates radio will ring up 6 percent of total campaign spending in 2008, hitting $272 million. CBS Radio president of sales Michael Weiss says widely disparate pricing has scared off prospects in the past. “Stations were charging $1,500 for issue ads and $500 for political ads,” he says, and campaigns “felt like they were being ripped off. The cost-per points were higher than TV, so they bought TV.”
Radio also is figuring out how to best manage inventory—a careful balance of offering more units at varied lengths, presenting innovative sponsorship opportunities for entire program segments and maintaining rate integrity. “Advertisers are looking for new options and choice,” says John Hogan, CEO, Clear Channel Radio. “To think in today’s competitive media environment that any single-length spot is right for all advertisers is pretty myopic.”
Advertisers also are demanding more accountability, something that hit a snag this past November when Arbitron, pressured by several radio groups and the Media Rating Council to do a better job with its 18-34 sample, delayed the rollout of its portable people meter ratings service in the nation’s largest markets—leaving the industry to do business based on the diary-based service, in which few advertisers have confidence. “Radio may not be getting the consideration it deserves because it can’t be looked at through the same lens as other platforms with more data attached to them,” says Maribeth Papuga, senior vp, local broadcast at MediaVest.
Many radio execs believe now is the time to pull together. “For the betterment of radio, we need to start doing things collectively,” said CBS’ Weiss. “Fighting out in the open—it’s a paradigm we need to get out of. Whatever the PPM problems are, the cumes are an amazing story. We know more people are listening than we ever thought. We need to do a better job telling everybody. Our medium is a lot more sexy than people make it out to be.”
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