Analysts forecast a 6% to 9% rise in the third and fourth quarters, an improvement over the 1% decline in the first quarter and the estimated 4% gain in second.
Inventory began to tighten at the beginning of 2002, and by the second quarter broadcasters were raising rates and selling monthly commercial space earlier, a sign of marketers' increased confidence, according to Jim Boyle, managing director at Wachovia Securities. "Advertisers believe there will not be a double-dip recession and that consumers will continue to spend," he said, "and therefore they have to continue to advertise."
Most industry watchers agree the medium is returning to normal levels-and doing so more quickly than other venues like print-but that the 2000 boom is unlikely to return. "The growth levels of that time were abnormal," thanks to the strong economy and dot-com advertising, said Gary Fries, president-CEO of the Radio Advertising Bureau, adding that radio recovers more quickly than other media in a post-recession environment, as it did in the early `90s.
"Of all the sectors in media, you're probably seeing one of the fastest rebounds in radio," because it's a good value on a cost-per-thousand basis, according to Jason Helfstein, an analyst at CIBC World Markets.
Some categories, such as automotive and telecommunications, are steady, but a wholesale radio recovery will require a pick-up in the overall economy as well as marketers' bottom lines, said Marc Guild, president of the marketing division of Interep National Radio Sales. "We are seeing relatively nice numbers for 2002, and after a year like 2001 that's encouraging."
Another reason for the rise: easier comparisons. Radio revenue declined 10% in the last four months of 2001, in part due to three days of no advertising in the wake of Sept. 11. This year radio will benefit from three more advertising days-a 10% rise-as well as the return of airline, travel and hospitality advertising.
"I think people are feeling that once they get past September, things should pick up dramatically because of comparisons," said Natalie Swed Stone, director of national media services at Omnicom Group's OMD, who said marketers' plans for network radio remain tenuous. "There are still questions about the third quarter, but the fourth quarter will be good."