Radio ad revenue up 6.2% in 2005 as digital plans step up

Australia’s metropolitan commercial radio stations attracted advertising revenue of $591 million in 2005, a 6.2 % increase over 2004, according to data released by Commercial Radio Australia. However the 6.2% rise was some way behind its 15% increase in 2004.

The data, compiled by PricewaterhouseCoopers for the five major capital city markets, showed Perth recorded the strongest growth in advertising revenue over the 12 month period (up 10.3 per cent), followed by Melbourne (up 8.2 per cent). Sydney, which accounts for about 40 per cent of revenue, grew by 3.5 per cent over the year, while Brisbane rose by 6.4 per cent.

Commercial Radio Australia chief executive officer Joan Warner told radioinfo: “While advertising growth has slowed compared with the exceptional 15 per cent increase experienced in 2004, the figures show commercial radio continued to perform well in 2005.”

“Advertising revenue grew by 8.7 per cent in the June half and 4.1 per cent in the December half, reflecting the overall slowing of the advertising market in 2005”.

Advertising revenue for the five markets rose to $315.7 million in the December 2005 half compared with $303.4 million for the same period previously. In the month of December 2005, revenue increased by 3.3 per cent to $52 million compared with December 2004.

Ms Warner said commercial radio was expected to remain competitive in 2006 against other main media. “Radio has traditionally weathered periods of uncertainty well because its immediacy and shorter production times provide advertisers with more flexibility”.

“Commercial radio has also been successful in retaining strong audiences through 2005, particularly in the highly competitive breakfast shift, where listener numbers reached their highest levels in more than five years”.

The first radio ratings survey period for 2006 began this week, with results to be released on February 21. There will be eight surveys conducted by Neilsen Media Research during the year in each of the five mainland capital cities.

CRA will resume its brand campaign, featuring high-profile marketing identities talking about the benefits of commercial radio, with a new series of ads on 30 January.

Meantime David Crowe in today’s Financial Review says that, as the industry enjoys continued growth in the five big city markets, commercial stations are to step up their plans to spend more than $300 million on the introduction of digital radio, clearing the way for negotiations with the federal government over public subsidies to upgrade regional networks.

Crowe reports broadcasters are preparing a study of transmission networks they will need to launch digital radio by 2008 or 2009 in the first step toward a more precise estimate on the investment required.

Metropolitan radio ad revenue 12 mths ending Dec 2005
Market Revenue ($mln) % change over 2004
Sydney $227.8 3.5
Melbourne $162.6 8.2
Brisbane $86.6 6.4
Adelaide $53.3 6.9
Perth $60.7 10.3
Total $591.0 6.2
Source: PricewaterhouseCoopers