10 Hot Media Markets

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The san Francisco Bay Area stands as a veritable Coit Tower above the nation's media markets in generating gross media ad revenue per household, according to Advertising Age's 10 Hot Media Markets report.

Restaged after a 12-year hiatus, the report found Bay Area media leading all U.S. markets, drawing $945 in media spending per household in 1999 based on local media returns. That's well ahead of the $843 credited to No. 2 Los Angeles.

The 10 markets accounted for $18.2 billion in local advertising, up 11.5% from 1998. That's about 22% of the nation's local ad pool of $83.7 billion, representing spot and local TV, newspapers, spot and local radio, local cable and outdoor. In these 10 top media markets, TV typically claims 39% of the media revenue, newspapers 35% and radio 21%. Outdoor and cable TV split the rest.


The local ad numbers show discretionary spending by advertisers and don't reflect total dollars advertisers might "credit" to various markets as so-called uncontrolled allocations based on the local exposure obtained by a national/network buy.

The Bay's Designated Market Area, comprising the greater San Francisco-Oakland and San Jose region as determined by Nielsen Media Research, offers an extremely vibrant media environment, not only in ad volume but in the number and quality of media properties as well. The Bay Area tops ad revenue per household in both radio and newspapers and places third in TV.

San Francisco radio properties achieved the highest growth rate in ad revenue of the nation's major markets, up 31.6% in 1999 compared with 1998; San Jose tied with Chicago for the second highest at 25.9%, according to "Duncan's Radio Market Guide." This growth translates into $195 in radio advertising per household in 1999, some $42 per household spending over 1998 levels. The Duncan guide was the primary source for spending in this report. Data from Competitive Media Reporting were used for select markets.

Ad revenue per household is determined by dividing media totals by the number of TV households supplied by Nielsen. These households represent about 99% of total homes in a given market. The Bay Area ranks fifth nationally in TV households.

The household variable tends to be the static number in the equation. Among the hot markets, household growth ranged from a 3.8% uptick in San Diego to 1.1% in Boston in 1999 over 1998. Movement in revenue per household is typically driven by advertising because of its more dynamic growth-from 15% in Atlanta to 7.9% in Miami-Fort Lauderdale in 1999 over 1998.

The ranking method works against the big media centers of New York and Philadelphia. New York hit $686 in ad revenue per household. The Big Apple's 6.87 million TV households (up 0.9%) number 1.64 million more than in Los Angeles, but New York's media tally is only nominally larger (7%). New York finished No. 11 and Philadelphia No. 12.

In absolute terms, New York is the nation's largest media ad market based on the same five media at $4.72 billion, up 10.6%. It is followed by Los Angeles at $4.41 billion, up 11.7%; Chicago, $2.62 billion, up 11.9%; San Francisco, $2.29 billion, up 12.4%; Philadelphia, $1.78 billion, up 11.4%; and Boston at $1.61 billion, up 9.8%.


The radio climate in San Francisco is hot, attracting the nation's largest radio conglomerates. Five station owners control about 80% of the San Francisco radio ad market valued at $473.1 million in advertising.

Viacom and Clear Channel Communications, each with seven stations, collectively account for 43% of the radio ad take.

Four TV stations each generate $100 million-plus revenue. Only Los Angeles and Chicago among the Hot 10 have more stations delivering that volume: seven and five, respectively. After years of infighting, the DeYoung family, owner of Chronicle Publishing, last year sold KRON-TV, the NBC affiliate and the region's leader in TV revenue, to Young Broadcasting. Young owns the nation's largest independent station, KCAL-TV in Los Angeles.


The DeYoung family also unloaded the Bay Area's dominant morning San Francisco Chronicle to Hearst Corp., owner of the evening San Francisco Examiner. The two have been linked for years in a joint operating agreement set to expire in 2005. Hearst satisfied regulatory authorities by giving the Examiner and a $66 million subsidy to local publisher Ted Fang.

Local media pundits had speculated that once the JOA ran its course, the strong newspaper competition surrounding the city would kill off one of the metro dailies. The Chronicle, waging a daily battle for core city readers against the Examiner, has been fighting for suburban readers in the south against Knight Ridder's San Jose Mercury News and to the east against MediaNews Group dailies in Alameda County and Knight Ridder newspapers in Contra Costa County.

Market demographics make the San Francisco area extremely attractive. The area is young (it includes 284,000 students), wealthy and highly educated. In just San Francisco-Oakland, 34.8% of the population has completed four years of college and 28.3% one to three years. Average household income is $60,761 in San Francisco-Oakland. Only Washington among the Hot 10 is higher at $63,892.


Miami-Fort Lauderdale is last among the 10 in average household income at $33,478. Its media delivers a decidedly Latin beat: WLTV-TV, the market's share leader, is a Univision Communications station; the largest radio property by revenue, WAMR-FM, is a Spanish-language station.

In the first appearance of the 10 Hot Media Markets report in 1988, Miami-Fort Lauderdale led in ad revenue per household with $598.

Since then, the Designated Market Area's population growth of 17.4% has surpassed that of other leading media markets and depressed growth in local ad revenue per household. By contrast, the San Francisco Bay Area grew 9.8% in population in the same period, solid among the rest of the hot markets.


R. Craig Endicott, Dataplace editor; Kevin Brown, Ad Age Group data manager; Cavanaugh Gray, editorial assistant.

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