Healthcare may be the new #1 category


Like so many of its peers, Young Broadcasting saw revenues decline in Q2. But CEO Vincent Young made a point of pointing out to investors and analysts three growth areas to counter the doom and gloom being heard daily in the media.

First up is the Healthcare advertising category, which Young calls “a very big growth area for us – and we’ve just scratched the surface.” He sees big things ahead for the category. “We think by 2012 it will represent more revenue than auto does to us today,” he said. Year-to-date for the nine Young Broadcasting stations (excluding KRON-TV San Francisco, which is for sale), the CEO said only one has seen Healthcare billings decline. “We’re looking at about a 10% increase over last year,” Young noted, adding that the sector currently represents about 14% of local billings – and is “growing dramatically.” This is not just about local spot. “The stations’ Internet sites are integral to the success in this category,” Young noted.

Home Improvement is another growth category for the Young Broadcasting stations, with billing up about 5% YTD. A lot of the businesses in the category, Young said, are small- to medium-size local businesses who never advertised on TV previously because the sales reps from the yellow pages and newspaper told them that TV was too expensive – and TV reps were raking in enough other business that they never called on them. That has changed.

And there’s even growth in one part of Automotive. “Yes, even in this environment of negative auto growth, we see something that’s very, very exciting to us. Factory and dealer group dollars are certainly severely off from where they were. They will be back when the automotive manufacturers want to sell cars instead of cutting costs,” Young insisted. But meanwhile, “Our automotive growth is the local dealer money. Five of our nine stations are up. Billing is about flat and it represents about 15% of our local billing,” Young said. Although the automakers and dealer groups generally had the big budgets, he noted that with the local dealer the station is able to pitch directly to the entrepreneur who has to move cars off the lot. They also have used cars to sell and repair services to pitch, Young said, so more than one area of business to advertise.

RBR/TVBR observation: The way to deal with tough times is to come up with some new ideas. Integrating the new media assets of local television stations with traditional spot sales is clearly the key to opening up some ad categories that historically have not made much use of TV.