Radio Ad Sales Look Promising

We know that print media is struggling with floundering subscriptions, how is radio faring?

An article in today’s New York Times Business Section about Clear Channel’s impending sale sparked this question. The bids for the company are supposed to value the company at $18 billion dollars (or about $36 and $37 per share). While this number seems high, the article also highlights that the radio industry is in “secular decline,” like their counterparts in the print medium.

The radio industry has been in a secular decline over the past decade, with listeners curbing their time tuned in by 14 percent, according to Arbitron ratings. Analysts blame the decline on listeners spending more time with iPods and competition from subscriber-based networks like XM Radio and Sirius Satellite Radio.

It seems many of the conversations about the changing media focus on the decline of the print media and the re-focus on online outlets. Radio is also being impacted by changing technology. Ipods and subscription radio (like XM and Sirius) have drawn listeners away from the radio. As listeners move on, advertisers quickly follow.

Two recent articles, however, have hopeful news for the radio advertising industry.

According to an article on CNET News, Google is investing in the radio industry by doing public testing of Google Audio Ads. “Advertisers will be able to go online and sign up for targeted radio ads using the same AdWords system they use to buy Web search ads.” The plan will include hiring up to 1,000 employees dedicated to the radio sales force, engineering and operations.

Media Life Magazineis reporting that ad spending forecast is expected to rise in 2007 after a weak spell. A report from BIA Financial Network, a media research outfit, indicates a 2% growth in 2007, 2.5% in 2008, 2.6% in 2009 and 3% in 2010. The growth is dependent on local advertising.

There is no doubt that a discussion on dropping subscription rates and advertisers will continue to focus on print outlets, but the changing media will also impact the future of radio and broadcast.

Cristian Mezei (not verified) @ November 15, 2006 - 9:47am

Google has been testing radio ads and TV ads for a long time. :)

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