BIA Financial Services VP Mark Fratrik has once again lowered his radio ad revenue forecast for 2009. He’s now looking for industry revenues to fall 15% this year to only $14 billion – although the fall and winter months shouldn’t be quite as bad as what has been experienced thus far.
Fratrik told RBR/TVBR he isn’t changing his percentage gain/loss projections for 2010 and beyond at this point, because he still sees improvement coming in the second half of 2009. So, for now at least, you can take the chart we posted in March and just move the 2009 bar further down to a 15% decline from the previous forecast of a 10.6% drop.
That 15% decline for the full year is still a bit on the optimistic side, Fratrik noted, compared to what the industry has actually seen so far this year. Part of the reason for the first four or five months of 2009 being worse than he had expected was, as you might expect, the troubles at GM and Chrysler. And going forward, now that both have eliminated thousands of dealerships, Fratrik sees the advertising recovery being slowed by having fewer dealers to buy ads on radio.
“It isn’t just the cars,” Fratrik noted. “Except for McDonald’s, what other company is advertising more?” he asked.
But while he’s predicting ad revenue declines year-over-year for the rest of 2009, “the negative numbers won’t be as negative as they have been, but they will still be negative, not positive,” Fratrik said.
The analyst is still expecting to see advertising start to come back as the economy improves, so he’s looking for some “positive but not very startling growth” in 2011 through 2013. Of course, to get to those modest gains the radio industry still has to endure the declines he is forecasting for both 2009 and 2010.
RBR/TVBR observation: Everyone is searching for the bottom to the ad recession. Hopefully, Rupert Murdoch and Jeff Zucker are right and we have found it. But that doesn’t mean that the second half of 2009 will be good – just less awful.