There are few silver linings in adspend these days. Advertising in key media like TV and radio are expected to remain on a downswing this year, as marketers cut back because of worries about negative macroeconomic factors such as rising unemployment/underemployment, stagflation, business failures, bankruptcies, residential foreclosures and waning consumer demand. According to MediaDailyNews, the losses in adspend are the result of substantial declines in local advertising (traditionally the bedrock of radio revenues) and national advertising.

Wachovia’s analyst Marci Ryvicker recently predicted a 13% decline in radio revenues for 2009; she had previously forecast a 9% decline for 2008. The Radio Advertising Bureau has just announced that 2008 radio revenue dropped 9% to $19.5 billion. Local slipped 10%, national declined 12%, and local and national combined for a 10% dive.

An equally insidious quandary paralleling the revenues crisis is the high debt levels most radio broadcasters are faced with today. Reporter Sarah McBride’s article in the November 10, 2008 issue of the Wall Street Journal notes that during the 1990’s “radio companies loaded up on debt during a consolidation spree that narrowed the industry to just a few big companies.” McBride observes that the burden of this leverage, coupled with limited access to credit and/or debt load covenants, has made what generally has been a recession-proof industry highly vulnerable.

According to McBride, “radio companies are … changing the way they operate.” A case in point is CBS Radio (owned and operated by CBS), which has begun executing its small-market business model in larger metropolitan markets, such as by duplicating an AM station on the FM dial, as CBS Radio strives for ratings boosts with certain demographics. Some media analysts believe progressive radio stations may in the future incorporate “megaplaylists” consisting of up to 5,000 songs encompassing a diverse continuum of music, high-definition radio and Internet streams replete with extensive artist background information, links to musicians’ websites and other popular off-air resources. Such a move could enable them to regain some of their market share from web-based radio services without cannibalizing their own.

There are other rays of hope amidst the media gloom. TV viewing, for example, is at all-time highs (see the article titled Gazette SoundByte - TV Viewing At Record Levels, in the December 2008 issue of The USIM Gazette®.) According to Arbitron, the leading firm that measures radio audiences, radio-listening hours are almost 19/week, about 3 hours per week less than in the 1990’s, but still at a respectable density in this Internet era. What's more, radio still enjoys the highest penetration-to-cost value of any other major media. Clearly, radio is far from obsolescence.

US International Media is committed to helping clients weather the tough economic climate. We help clients stretch their budgets by offering innovative strategies. Consider a recent advertising strategy we developed for a major client working with a restricted media budget. We constructed a marketing plan that uses a mix of bookend  :30s and regular :30s for the client’s LMAs, helping stretch available budgets while adding impact to the commercial messaging. We presented the client with compelling statistics documenting the value of  :30 second bookends (:15/:15), which amplify exposure frequency, enhance message impact and cost the same as a :30 second commercial.

Over 80 percent of USIM's current employees are Western International Media Corporation alums, which provides significant knowledge continuity and competitive advantages. U.S. International Media is one of the largest independent media agencies in the business, serving more than 200 clients from 17 U.S. and 9 international offices.

By Darrell Woody

Gazette Staff Writer

Stretching client dollars while moving campaigns forward.