Katz, CC Radio say spot is on an uptick


Looks like it isn’t just be the usual blitz of holiday ads this time of year. There are some real signs of a recovery for the radio ad market and this good news (below) is not just posturing. Katz Media and CC Radio say they are both seeing unmistakable increases in business. Their national spot ad sales are up 13.2% year-over-year for December. January’s pacing up 17.4% year-over-year.

Of the top 10 advertiser categories, four were up in November, eight in December and eight are ahead for January. Automotive, telecom and consumer products are all up for all three months.

Virtually all market sizes are up: For January, top 10 markets are up 21.8%; 11-25 markets are up 19.3%; and 51-75 markets are up 33.6%.

For local ad sales BOB revenue has moved into positive territory – up 3.4 points. Three weeks ago, December 2009 was pacing at -3%. This week, December is pacing at +1.4%–an almost 4.5 point gain in 3 weeks.  

January AMR pacing holding at +5.6% with BOB revenues up 5.5 points in the last three weeks.
Things are so good, the email we got from Katz/CC said, “So those media buyers hanging on the sidelines hoping for price cuts in 2010? Sorry…”

One buyer responded off the record: “It’s both posturing and fact-based…and guess what? Sales IS posturing…nothing wrong with that.  It’s up to buyers to see the difference between the reality and the ‘smoke and mirrors’. Local Radio (National Spot) had a more dramatic marketplace shrinkage than Network, so they’ve got a larger hole to climb out of.  That said, it’s the strength of a listener’s relationship with “their” local stations that will continue to provide the benefits of radio/audio–whether on air, online, or downloaded.”

Here are two emails supplied by Katz/CC Radio to support:

From: Soechtig, Chris
Sent: Tuesday, December 15, 2009 5:04 PM
To: Radio All Sales Managers; Radio Director of Sales
Cc: Radio EVP Operations; Radio General Managers – All
Subject: Positive market conditions!

Good afternoon Sales Leadership,

I am reaching out to you with very positive news that requires immediate attention.  Over the past several weeks, we have seen impressive improvements in business condition for both December 2009 and Q1 2010.

•         In conversations with John Kauffman, we have recognized very positive trends with our inventory.  In fact, just three weeks ago, December was pacing at -3% for AMR.  In the most recent week’s report, December AMR’s are pacing at +1.4%. 
•         More significantly, BOB revenue has moved into positive territory at +0.1% for December (an improvement of 3.4 points)!  
•         Another key measure is to look at our performance vs. TWO years ago (2007).  December is at least 5% better on this measure than any other month during the year.

As we are now 100% focused on 2010, it is encouraging to report the following news:  
•         January AMR pacing has maintained itself at +5-6% while BOB revenues have improved 5.5 points in the last 3 weeks! 
•         Finally, if the “two year” trend continues, we will be up nicely in Q1.     

The news is exciting and straightforward – – significantly more business is being placed NOW than it was this time last year.  We need to recognize this trend and operate accordingly.  Increased demand leads to tightening of the market.  Obviously, every market is different.  However, as a company, we are gaining traction and inventory will be less available.

Now is the time to reach out to clients and urge them to place sooner than later.  Advertisers became conditioned in 2009 to WAIT for the best deals.  Increased demand coupled with improved inventory management and pricing systems will continue to reverse that trend.  We need to let advertisers know these conditions and suggest they act before prices increase.

Don’t forget the basics… Thoroughly review non-returning business and reach out to those clients immediately.  They may be sitting on business waiting for rates to drop.  Today, we can confidently say that will not happen.  Furthermore, hold your AE’s accountable to pending business.  If a deal is on their list for more than 2 weeks, contact the client directly and see what we need to do to get them booked ASAP.

We have all been looking for the “light at the end of the tunnel”.  It appears to be closer than ever.  I wish everybody a prosperous 2010 and look forward to working with you as we LAUNCH the plans for our Sales Operation Center.  More details to come!


***  ****

Sent: Thursday, December 17, 2009
To: Radio
Subject: National Spot Radio – Status Update

National Spot Radio – Status Update

National Spot Radio is showing strong evidence of a rebound.

After bouncing along the bottom for most of 2009, demand for National Spot Radio in the year’s final quarter is increasing, signifying a solid start to 2010. CCRS and KRG are experiencing a meaningful increase in sold inventory, dollars booked and pricing.

Comparing November and December 2009 vs. 2008, without political, and January 2010 vs. 2009, KMG Consolidated Radio is up 2.4% in November and 13.2% vs. December 2008. Pacing is up 17.4% in January 2010.

During this same three-month period, demand on inventory usage rose 23% in November, 32% to-date in December, and is on pace for a 36% gain in January. AUR pricing vs. September YTD is up 6.9% in November, 4.2% higher in December, and moving up in January and through 2010’s first quarter—all driven by increased demand.

We are seeing a broad-based recovery from a category standpoint. Of the top-10 categories, four were up in November, eight in December and eight are ahead in January. Importantly, the bell-weather automotive category is up in all three months, as is telecom and consumer products. Retail, finance/insurance and fast food are up in December and January.

Further evidence of a real turnaround—and especially encouraging—is that all market groupings are pacing ahead of the prior year in December and January, with the exception of markets 26-50 in January, which is down 0.5%.

Comps remain soft, but real dollar growth, improved demand, improving pricing and broad category and market grouping recovery clearly indicate we are moving in the right direction. As we turn the page on 2009, we believe this is the start of a real recovery. 

Please make sure we are communicating with our customers that while radio is not sold out we are experiencing stronger demand, earlier placement and increasing pricing.  Encourage them not to wait to negotiate and place business as these trends will most likely intensify.

Here’s to keeping the momentum building and knocking it out of the box in 2010!