Media economist Jack Myers forecasts radio revenues will fall 18.7% this year, but Myers says, “Long term, I see a turnaround for radio.” He’s forecasting billings will be off another 3.5% next year as revenues fall to $14.8 billion. But then in 2011 radio will return to growth.
Myers’s projects a 5% gain, followed by an 8% increase in 2012. “There is a recalibration of media budgets,” explains Myers. “Advertisers are looking for lower-cost alternatives including radio, which puts it in a valuable position.”
Radio is also situated for below-the-line promotional and retail trade dollars as well as other budget lines that don’t come out of traditional advertising marketing plans. Myers believes the medium also has a “head start” on the growing focus to tie brands to specific personalities. On television that typically means product placement, but for radio it’s a focus on air personality endorsements. “Advertisers are asking for local announcers to be more proactive advocates and radio is going to be very well-positioned,” he says.
He tells Inside Radio marketers are increasingly taking a second look at radio — as a component to multimedia plans that blend digital, mobile and traditional media. Myers adds, “The worst thing radio can do is nothing and expect advertisers to come back without making fundamental changes to its business model.”
It’s no wonder radio may see another year of revenue declines. Myers says marketing budgets will not only fall this year by 13%, they’ll drop another 5% next year. Myers says 12 of the 18 media sectors will post negative year-to-year performance.
In a sign of how tough a marketplace it has become, Myers projects total internet advertising to decline 0.5% this year then increase less than 1% next year. He sees the web entering a period of “sustained” mid-to-high single digit growth in 2011. “The major bright light for 2010 is political spending, which will have a significant positive impact on local market ad spending, especially impacting local television, local radio and newspaper advertising,” says Myers.