Radio Sales Company Says Key Ad Categories Continue to Rise

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CHICAGO ( -- Interep National Radio Sales reported lower net income in the second quarter but saw an increase in radio commission revenue and remains optimistic that radio advertising in key categories will continue to rise.

Net income decreased almost 75% to $311,000, or 3 cents per share, from $1.2 million, or 12 cents per share, in the year-earlier period. But revenue from radio commissions -- the rep firm's core business -- increased 4.6% to $23.7 million from $22.7 million in the second quarter of 2001. The company also reported $4 million in revenue from contract terminations -- money paid to Interep by radio stations when they buy out existing contracts.

Strong forecast for year
The increase in

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radio revenues and continued rise in top radio ad categories led Interep to forecast full-year radio commission revenue of $82 million to $83 million, a 3% to 4% increase for the year.

Categories that showed strong pacing in the second quarter included home video, transportation, automotive and cable broadcasting, Interep Chairman-CEO Ralph Guild said in a conference call to analysts.

May was a particularly strong month, he said, and "many advertisers were actually shut out because of inventory shortages ... a definite positive sign."

Categories increasing radio ad dollars in the third quarter include computers, transportation and consumer products, Mr. Guild said.

Radio is 'recovering faster'
"Radio appears to be recovering faster than other media. We believe radio will gain share of total ad dollars in 2002 and get back to or exceed the 8% mark which we achieved in 2000," Mr. Guild said.

To that end, Interep last week announced the formation of seven Consumer Lifestyle Networks aimed at the consumers most likely to buy an advertiser's products or services. The networks include frequently requested ad targets such as affluent consumers, family shoppers, African Americans, U.S. Hispanics, men, women and young adults.

"These networks are designed to make radio buying more effective for advertising agencies" by aggregating attractive consumers into packages, Mr. Guild explained.

Last year, the company spent $1.5 million to launch a sales and marketing effort to bring more advertisers to the medium.

'Self-defeating scenarios'
"Taking money from one radio station for another ... or one rep company taking business away from the other is really a self-defeating scenario for this industry," Mr. Guild said.

Interep, an independent national spot radio rep firm, is the exclusive sales arm for more than 2,000 radio stations nationwide, including radio stations owned by seven of the 10 largest radio groups by revenue.

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