New advertisers switch on to radio

Two revenue reports, released by Commercial Radio Australia, show the radio industry is attracting new advertisers and continuing to record strong growth in metropolitan revenue.

Nielsen Media Research advertising expenditure data reveals the retail sector has retained its place as the top advertiser on commercial radio in 2003-’04, but non-traditional advertiser categories such as dental products, clothing and education have recorded the biggest percentage increases in radio ad spend.

Retailers spent $145 million on metropolitan commercial radio advertising last financial year (up 6%), with Harvey Norman, Myer and Woolworths the largest advertisers in the group.

The categories with the five biggest percentage increases are dental products (up 392%); hair care (up 113%); education and learning (up 100%), pet care (up 60%) and clothing and accessories (up 51%).

Commercial Radio Australia chief, Joan Warner, says: “Traditional radio advertiser categories such as finance, entertainment and motor vehicles have maintained their spending at relatively stable rates, but the exciting news is that a lot of new advertiser categories, which are not traditionally big radio spenders, have come on board and, in some cases, have doubled and even quadrupled their spending compared with last year.

“We are seeing a broader range of advertisers across the board increasing their use of radio on a national level.”

Thirteen out of 39 advertising categories in the report have grown by 20% or more. One of the few categories to show a significant decline is garden, which has dropped 37% as a result of the drought.

PricewaterhouseCoopers data also shows radio advertising revenue has continued its strong growth in the first quarter of 2004-’05 compared with 12 months earlier.

“Metropolitan radio advertising revenue increased by 16.1% in September, for the ninth consecutive month of double digit growth,” Joan Warner says. “In the first quarter, advertising revenue grew by 17.7% to $143 million in the five major capital city markets.”

Brisbane is the fastest growing market in the September quarter, recording a 27% rise to $21 million. Perth is up 23%, followed by Melbourne (22%), Sydney (12%) and Adelaide (9%).

“Federal election advertising by the political parties, particularly in Brisbane and Perth, as well as increased advertising by utilities, communications, clothing and toiletries manufacturers has contributed to the growth,” says Warner.

“The industry will be working to maintain the momentum into the December quarter, which is traditionally a peak period for radio advertising in the lead up to Christmas.”

Maintaining growth for radio will be a key topic to be discussed when industry leaders meet tomorrow for the annual national radio conference on the Gold Coast.

Prominent advertising industry leaders will sit on a panel to discuss the issues, including Roger Camplisson, MD of Initiative; Bob Goodge, Business Director of Starcom Worldwide (Australia); Douglas McArthur, chief of the UK’s Radio Advertising Bureau; and Siimon Reynolds, co-founder of the Photon Group.

Warner says: “We have a lot more work to do to convince advertisers to lift radio’s share of the total advertising pie above 8% – but, we are moving in the right direction. We just have to keep the momentum going.”

Radio Advertising Revenue Growth (month percentage change compared with same month in 2003):

January – 19.3%
February – 15.5%
March – 14.5%
April – 12.2%
May – 12.7%
June – 23%
July – 25.5%
August – 12.4%
September – 16.1%