US Radio Advertising Set For 5.3% Growth In 2003, Says Merrill Lynch
US radio advertising revenue is forecast to grow by 5.3% in 2003, with national advertising continuing to out-pace local, according to analysts at Merrill Lynch.
National spot spend has been outperforming local revenue for some time now, with the latest figures from the US Radio Advertising Bureau showing national up 23.0% in October 2002, compared to a 10.0% rise for local spend (see US Radio Revenue Maintains Strong Growth, Up 13% In October). Merrill Lynch says that a slow economic recovery, coupled with tougher comparables moving into H2 2003, will cause national and local growth rates to converge.
| 2002 US Radio Advertising % Growth | ||||
| Local | National | Combined | Combined Year To Date | |
| January | 1.0 | 2.0 | 1.0 | 1.0 |
| February | -6.0 | 1.0 | -5.0 | -2.0 |
| March | 1.0 | 1.0 | 1.0 | -1.0 |
| Q1 2002 | -1.0 | 1.0 | -1.0 | -1.0 |
| April | 2.0 | 6.0 | 4.0 | 0.0 |
| May | 1.0 | 11.0 | 3.0 | 1.0 |
| June | 2.0 | 7.0 | 3.0 | 1.0 |
| Q2 2002 | 2.0 | 7.0 | 3.0 | 1.0 |
| July | 7.0 | 16.0 | 9.0 | 2.0 |
| August | 4.0 | 9.0 | 5.0 | 3.0 |
| September | 14.0 | 25.0 | 17.0 | 4.0 |
| Q3 2002 | 8.0 | 17.0 | 10.0 | 4.0 |
| October | 10.0 | 23.0 | 13.0 | 5.0 |
| November | – | – | 9.0 | 6.0 |
| December | – | – | 10.0 | 6.0 |
| Q4 2002 | – | – | 11.0 | 6.0 |
| FY 2002 | – | – | 6.0 | 6.0 |
| FY 2003 | – | – | 5.3 | – |
| Source: RAB/Merrill Lynch, January 2003 | ||||
For the full year 2002, radio is estimated to show ad growth of 5.9%, against total domestic spend of just 0.7% and this strong outperformance of the market is expected to continue into 2003. The broker says its forecasts may prove to be conservative if advertisers start to commit to larger budgets, following two years of tight advertising budgeting, employed to protect profits.
Merrill says that an ageing newspaper demographic and declining circulations in that sector are likely to result in an increase in radio’s share of the ad market. In 2002, radio is expected to take 8.1% of all advertising, up from 7.7% in 2001; in 2003, radio is forecast to nudge up again to 8.2%.