Boyle analyses LIM one year later
In 2005, the radio industry largely participated in the inventory reduction effort, "Less Is More" (LIM) by Clear Channel. Media Monitors retained Wall Street analyst Jim Boyle to explore its database from the Industry's major markets to ascertain LIM's impact and other Industry trends in 2005.
Three trends that were notable in 2005:
1. The top Radio advertisers were exactly the same ten companies in 2005 as they were in 2004. The Media Monitors Spot Ten chart data shows dominance in both years from three Automobile manufacturers (Toyota, Ford Lincoln Mercury and Chrysler Jeep Dodge) and three TV Networks (ABC, CBS, and Fox), but with a new leader, Geico automobile insurance.
2. A 3.6% decline in commercial spots occurred in 2005 versus 2004, and the largest Radio advertisers dropped even more with a nearly 6.8% decline.
3. The three largest automobile advertisers purchased 5% fewer Radio spots in 2005 compared to 2004 while the two largest domestic automobile advertisers purchased 14% less.
Boyle's analysis of Media Monitors' database affirmed that the industry indeed made good on its strategic plan for 2005 being a transition year as it intentionally reduced commercial inventory to improve its product for its listeners and advertising clients alike. But, Boyle reports, perhaps the spot load was reduced more than had been expected as its largest ad category, automotive, sputtered and the incomplete Industry participation in the LIM effort may have dampened the subsequent demand from tighter inventory.
Additionally, Boyle reported these 2005 trends of note, based on Media Monitors data:
* Radio's Top 1,000 advertisers purchased over 6,770,000 commercial spots in the ten major markets alone in 2005. However, that was a 3.6% decline from 2004, when the top 1,000 Radio advertisers bought nearly 7,020,000 spots.
* Top Radio advertisers of 2005 as ranked by commercial spots in the major markets were (descending order, rounded to nearest thousand):
1. Geico (101,000 spots)
2. Verizon Wireless (82,000)
3. McDonald's (80,000)
4. Toyota (78,000)
5. Home Depot (68,000)
6. ABC TV Network (68,000)
7. Ford Lincoln-Mercury (59,000)
8. Chrysler Jeep Dodge (58,000)
9. CBS TV Network (54,000)
10. Fox TV Network (48,000)
* The heaviest Radio advertisers essentially purchased a similar (but fewer) number of spots in 2005 than they did in 2004. In 2004, the 11 largest Radio advertisers averaged over 100 Spots Per Week (SPW) per major market, yet by 2005 only the nine largest advertisers were able to achieve or beat that 100 SPW pace.
* Radio's better customers cut back the most. Although the top 1,000 advertisers declined in spot purchases by 3.6%, the industry's top 50 advertisers cut back an even more dramatic 6.8% from over 2,050,000 commercials in 2004 to just under 1,915,000 spots in 2005.
* Geico was the most prolific radio advertiser in '05, purchasing almost 101,000 spots in 2005, translating to nearly 200 spots per week per major market. Geico also had the biggest increase among on the Media Monitors Spot Ten chart of top Radio advertisers, moving up from 6th place in 2004, when it bought roughly 130 spots per week per major market. The 2004 leader, Verizon Wireless, edged down to the 2nd slot in 2005.
* Ford Lincoln-Mercury dropped most among the leading Radio advertisers by finishing 7th on the Media Monitors Spot Ten list in 2005 after holding the 2nd spot in 2004. Additionally, Lincoln-Mercury's average plummeted from 154 weekly spots per major market in 2004 to merely 114 weekly spots per major market in 2005 as per Media Monitor's database.
* Three of the ten leading radio advertisers were TV Networks. The competing media of television continued to rely heavily on the medium of radio to promote themselves in both '04 and in '05. ABC, CBS and Fox ranked 6, 9, and 10 on the Spot Ten list, purchasing over 170,000 radio spots collectively in the major markets in 2005.
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