Feature: Radio Proves Its Worth?
The latest set of RAJAR figures brought good news for Commercial Radio, which had suffered during 2000 from decreasing weekly reach. As a whole, the sector has seen a quarter on quarter increase of 3.7% in reach, its 1.1m listener increase taking audience levels back above those seen at the beginning of 2000.
Radio Advertising Bureau (RAB) revenue figures were less encouraging. Having fallen severely between the last quarter of 2000 and the first of 2001 – from £160.7m to £135.1m – revenues in Q2 rose just £1.5m, or just over 1%. From Q2 last year, revenues never dropped below £140m per quarter, despite continuing falling reach, but it seems that just as Commercial Radio is proving to deliver audiences again, advertisers could be losing faith.
Perhaps it is too soon to predict a major slump though, as forecasts from Zenith Media just one month ago suggested that Radio, with its advantages of cost effectiveness, could lead the media industry out of the current climate of recession.
Last year was also exceptional in advertising terms for several reasons. The most significant was the dotcom boom, which pushed radio ad revenues in the second quarter to their highest ever levels, £156.8m. After the bubble burst a second boost for radio came in the form of TV’s problems late in the year. As dissatisfaction with TV’s cost effectiveness increased, the medium had a very bad fourth quarter in adspend terms, while Radio, a considerably cheaper medium, saw its revenues increase, this time to a new high of £160.7m.
After these two boom periods, and with the smell of economic decline in the air, it is perhaps inevitable that advertisers finally responded to commercial radio’s poor listening figures for most of 2000 by withdrawing their investment in Q1 this year. It must also be noted that while this quarter’s revenue increase is small period on period , and negative to the tune of 12.8% on a year on year basis, it nevertheless shows an instant and positive response to Commercial Radio increasing its reach again. This means that the second half of the year could yet see Zenith Media proven right in its predictions of 5% growth for the year.
Radio may be “old media”, compared to interactive TV and the internet, but it nevertheless has future factors on its side, such as being delivered via websites on broadband and also the new generation of digital services.
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