Ad Revenue Sinks 24% in Radio’s Worst Quarter Ever

Radio advertising saw its worst quarter in history, with overall radio revenue down 24% to $3.4 billion.

National and local ad spending combined down 26% to $2.8 billion, according to the Radio Advertising Bureau. Network radio dropped 13% to $238 million, while off-air revenue fell 12%, to $264 million, writes Mediaweek.

Digital - all revenue derived from radio websites - jumped 13% to $101 million. 

Jeff Haley, RAB pres and CEO, puts a bright spin on the news: “Radio’s digital platforms are experiencing the greatest growth and are reflective of the dollar shift from media to marketing by many of today’s advertisers. As consumer and technological sophistication increases, advertisers will continue to support those platforms which appeal to their customers’ increased on-demand behaviors - and radio is primed for it.”

Communications/cellular/public utilities is now the #1 ranked spender in the Local and National sectors. Low-cost and prepaid wireless services MetroPCS, USCellular and Leap Wireless increased their radio spending by 97%, 90% and 25% respectively in Q1 2009 over the same quarter last year. Top spenders last year - including AT&T and Verizon Wireless, are still radio’s overall leading advertisers so far this year, according to (pdf) the RAB.

The Restaurants category is now local and national radio’s second largest spending reporting category, with McDonald’s and Burger King remaining as category leaders. McDonald’s spent $75.4 million on radio, outspending Burger King nearly 3 to 1. Television/Networks/Cable Providers is in third place for local and national sectors, with Showtime, TNT, TBS, ESPN and Fox Sports Networks all boosting their spend significantly.

The Automotive category in local and national radio, formerly the top spending category, fell to fourth place, though some in the category, including Volvo, Audi, and GMC, increased spending. Network radio, however, saw increases from many of the larger auto manufacturers, including GM, Chysler and Volkswagen.

SNL Kagan predicts that radio ad revenues will be down 15% for the year, while Wachovia is calling for a 13% drop.