Network Radio Rebounding

While the overall radio market was down 5 percent through February according to just-released numbers from the Radio Advertising Bureau, there are signs in the billion-dollar network radio marketplace that indicate the industry segment has turned the corner. Down 25 percent in January, network radio was down 16 percent in March.

Positive signs include the fact that network inventory, especially Urban and Youth networks, have been tightening. “It’s been difficult to get on with some late-breaking buys,” said Natalie Swed Stone, OMD’s director of national radio. “You now need 8-10 weeks lead time.”

However, concern still remains. “Things are heating up, but not to the degree where I can’t cut advantageous deals,” said Matthew Warnecke, director of national radio for MediaCom. Some advertisers, such as Procter & Gamble, are holding back. “People are still panicky about third quarter and beyond,” said Irene Katsnelson, vp and director of network radio for Mediavest, who noted she won’t even see P&G’s budget until next month.

With the release of last week’s Statistical Research’s RADAR 68 report, executives were quick to call the end of the industry’s recent slump.

“We’ve definitely seen the worst. This market is healthier than the NASDAQ or NYSE,” said Kraig Kitchin, Premiere Networks president, who is on a high from the report in which Premiere had seven of the top 10 networks. The report included 10 newly configured networks from Premiere, which added 600 radio stations to its lineups as a result of Clear Channel’s purchase of AMFM. Two new networks which feature live 10-second reads by local radio personalities are particularly attractive to retail and tune-in advertisers.

But first, rates had to come down to compete with Westwood One’s traffic 10s. “Premiere missed the upfront with high prices,” said Matt Feinberg, vp of national radio for Zenith Media. “The 10-second networks are good, but if they push high rates, [the networks] will die.”

Hearing the marketplace loud and clear, Premiere began holding meetings with New York buyers in mid-February, a practice it intends to continue, with the next scheduled for April 16. When Premiere dropped cost-per-points 35 percent for its 10s about three weeks ago, inventory in network radio gained traction. Some 40 brands snapped up 10s, such as Amazon.com, Lifetime and Sony Music.

“A lot has come down for second quarter, and the last two weeks have been big,” said Jennifer Purtan, ABC Radio Networks senior vp of sales and marketing.