National spot radio market update


The national spot radio market is posting gains for FY and there are also some positive trends for 2012, underscored by what many are predicting to be a record year in political advertising.  The national spot radio market is up 3.1% for full year 2011 over last year, although pacings have slipped 2.6% in Q4 compared to the same period a year ago (excluding political spending). 2012 pacings are up single-digits in the year’s first two months and solid demand from national advertisers.

According to Katz Radio Group, core advertising categories are showing mixed results. In Q4, the fast food, professional services, retail and finance categories are showing gains, but natural disasters in Asia earlier this year, including the tsunami that devastated parts of Japan, caused ripple effects through the auto sector and resulted in vehicle production delays. Automakers expect to bring production—and advertising—levels back by the end of this or early next year.

As expected, political spending is down significantly from 2010’s active election season, but a hotly contested presidential campaign and scores of contentious congressional races in key states will result in a strong rebound in 2012. Issue advertising focused on education, energy and the economy should also place additional pressure on inventory and make a positive contribution to radio’s bottom line. Katz also expects to see significant dollars from PACs and Super PACs as this is the first election year since the Supreme Court’s 2010 ruling allowing the raising of unlimited funds. 

The top seven categories below represent 85% of all National Spot Radio revenue, based on data as of November. While auto and Telecom are pacing lower in the quarter, Fast Food is looking to be extremely strong, likely due to a number of new menu introductions from QSRs like Wendy’s and McDonald’s. Professional services is also looking up:


Leading Q4 advertisers: Following a strong year in 2010, a number of national advertisers maintained healthy radio budgets this year. Some 92% of 2010’s national advertisers returned to radio in 2011, with many significantly increasing their ad budgets. For example, retailers such as Walmart, telecommunications companies like Comcast, and insurers including Allstate and American Family Insurance all increased their radio budgets by double-digit percentages.

Also, for FY, pacing looks to be better in smaller markets than larger ones. In fact, the pacing numbers decrease with market size, all the way down to 100+, where the trend reverses.

The largest individual advertisers within each core category for Q4: