Analyst says Less is More is working
After evaluating spot load data for of 200 stations in large markets, Harris Nesbitt analyst Lee Westerfield says commercial loads were down 13% in January from a baseline of last October and a lot more advertisers are, indeed, using 30-second spots.. The clutter cutting isn't yet pushing rates up, but Westerfield says that will come in time.
Based on Aircheck data from Media Monitors, Westerfield found that the reduction wasn't confined to Clear Channel and its Less is More initiative, although spot loads for Clear channel were down by an average 25% in the top 10 markets. "More surprising to me was how dramatic a shift to 30-second spots has occurred in the top 10 markets - - a nearly 30% shift in the ratio of 60s to 30s. That magnitude struck me as extraordinary," Westerfield told RBR.
But while clutter on radio is being reduced, it may take a while for the cleanup to have its desired effect - - putting upward pressure on radio ad rates. "My opinion is that we won't see much, if any rate increase during 2005," the analyst said, citing two reasons. "First, other media simply offer too much inventory at the moment. It's a non-political year. The accessibility of cable interconnects is an old but true story, and there's more inventory to be found in that regard. Broadcast network scatter inventory is open right now - - not at Fox, but at other groups - - and the national spot [TV] inventory, without political advertising, is wide open. Even if you cut inventory in radio, the demand picture and the competitive environment in an off-election year keeps the price elasticity from snapping at all. That said, fat burning is healthy. We hope radio companies keep to their dietary restrictions. 2006 and beyond are to be looked at as growth revival years," Westerfield said.
Spotload reductions by group
|
Radio
|
|
|
|
group
|
|
|
|
Radio One
|
8.1
|
0%
|
|
Clear Channel
|
8.7
|
-25%
|
|
Cox Radio
|
9.3
|
-9%
|
|
Entercom
|
9.8
|
-10%
|
|
Emmis
|
9.9
|
-12%
|
|
Beasley
|
10.3
|
-2%
|
|
ABC
|
11.1
|
-6%
|
|
Infinity
|
12.3
|
-5%
|
|
Note: Spots under :30 not included
|
|
|
Source: Harris Nesbitt
|
|
|
Are you reading this from a forwarded email?
