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Houston, with 3 million people and an upbeat economy, has the demographics that national advertisers can't resist and rates that give local advertisers affordable reach and frequency. The Texas city tops Advertising Age's list of hottest radio markets, with $93.4 in gross radio revenues per household, according to estimates.

Gross radio revenues increased 11.8% for 1993, according to Duncan's Radio Market Guide. Retail sales are reported at $30.3 billion and the average household income is estimated at $36,812.

Despite its size, the market is not saturated with radio stations-a plus for advertisers.

"Compared to L.A., where you have dozens and dozens of stations, Houston has fewer stations for this size market than normal," observes Jim Conlan, president of Radio Works, a Houston production company specializing in radio advertising. "For radio advertisers, they stand a better chance of being heard on any given particular station."

In addition, it's a good local buy, according to Sean Luce, local sales manager for CBS' KKRW.

"If there's one thing that makes Houston unique outside of Los Angeles, New York and Chicago, it's that in Houston you have a lot of direct advertisers who can buy good frequency and reach," he says.

Mr. Conlan also points to a growing Hispanic market, which makes up 20% of the population, as yet another reason for Houston's radio revenue growth.

Like the other hot radio markets, Houston has an enormous commuter pool.

"What makes this city so dynamic is that it's a very commuter-oriented city with well over 2 million cars on the road every single day," comments Mr. Luce. "There's commerce on every street corner. Radio is so instantaneous and intrusive. You can drive people from Westheimer Street straight into a retail outlet with radio."

New national business moving into Houston is being accompanied by growth in local sales partly because local advertisers know first-hand the amount of time people spend in cars. They note that drivers can spend as many as 90 minutes commuting.

"Local advertisers look at the marketplace and see that people are spending 1 hour and 10 minutes getting to work," says Larry Spiegel, principal at Richards Group, Dallas, which handles radio advertising for such clients as Continental Airlines and Motel 6.

New retailers and fast-food chains in particular have helped boost radio revenues in Houston, says Sherry Lawson, the broadcast supervisor at Richards' Dallas office, which handles all Houston radio buys.

"Venture Stores, for example, has expanded phenomenally," she says, "and elevated Target's and Wal-Mart's [radio] spending."

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