Canadian radio refuses to die

Despite the unceasing onslaught Web-based technology and predictions of being “subsumed” by new media, Canadian radio refuses to sign-off and die.

Instead, local radio advertisers turned up the dial recently to announce that radio ad sales for the third quarter of 2008 grew by an estimated 8.7 per cent compared to Q3 of the previous year.

“National radio has now posted eight consecutive quarters of positive growth -that’s the longest stretch since Q1 of 2002,” according to Patrick Grierson, president of Canadian Broadcast Sales (CBS). The CBS is a Toronto-based country-wide sales firm representing more that 60 per cent of all Canadian radio stations.

The normal quarterly churn of ad sales in the industry is approximately 40 per cent. “However, during this year’s Q3 only 33 per cent of revenue from 2007 did not repeat,” said Grier.

CBS was able to increase sales from new sources by 41 per cent to compensate for the turnover and now, Grier expects the positive pace to continue and ring up a 9 per cent annual growth.

Technology analysts note that consumer eyeballs are increasingly turning to online media but for now radio — which has been on air since the early 1900s — still holds a sizeable share of the airwaves.

“There is a shift in consumer behaviour and marketing expenditures but the existing media is not yet ready to go the way of the Dodo bird,” said Lawrence Surtees, vice-president of communications research for IDC Canada, and a former journalist.

For instance, he said, Canadian news consumers largely rely on traditional media for their current events fix because of its long held reputation for trustworthiness, the professionalism of its practitioners and quality of content.

A survey titled The National Media Choice and Trust Poll conducted last year by the IDC Canada indicated that 65 per cent of Canadian households have high speed Internet access. More than 42 per cent of access some form of online media for general new and another 21 per cent of consumers turn to online sources for breaking news.

However, 95 per cent of Canadians still rely on traditional media such as newspapers, radio and TV, for general new and an estimated 82 per cent use the same distribution channels to receive breaking news.

The CBS did not release and any dollar figures but reported that for Q3 of 2008, ads from restaurants were up 62.1 per cent; alcoholic beverages ads rose 27.3 per cent; financial services and insurance ads was up 22. 7 per cent; retail, 18.6 per cent and automotive ads rose by 12.2 per cent.

Banks increased radio ad spending by nearly 300 per cent followed by tire manufacturers at 111 per cent, according to the CBS survey. Telecommunications firms, however, reduced spending by 18 per cent during the same period.

“What’s noteworthy is that this growth has been steady, stable and sustainable with no volatility,” said Grierson.

Online advertising in Canada has been slow to take off until recently.

Numbers from eMarketer, a New York-based e-business trend research firm, indicate that in 2006, online advertising in Canada accounted for $1.01 billion. That number inched forward to $1.38 billion in 2007 and is expected to exceed $3.03 billion by 2011.

There were no specific spending numbers for Canadian radio.

The figures are not signaling the death of radio but the medium “is being subsumed into a broader sector called ‘audio’,” according to the research firm.

New digital and interactive technologies are changing traditional models and altering distribution and access of audio content, eMarketer said.

Internet and satellite radio, podcasting, high-definition radio and mobile audio services are transforming the radio industry which has remained virtually unchanged for a century.

Rather than shrink the market, Web-based technologies are expanding the marketing pie, according to IDC’s Surtees.

Public broadcasting organizations appear to be leading the charge in merged radio and online offering.

In Canada, the Canadian Broadcasting Corp. has been providing listeners with online radio service since the early 1990s

South of the border, public radio executives are revisiting an idea -brought up in 2003 – which involves branching out to the Internet to grab a parcel of the new media audience.

Western States Public Radio, an organization of broadcast stations in the U.S. West Coast, is considering the creation of a mega-Website for news. The site will offer a wider array of reports from stations as well as national networks.

In order to survive, traditional media channels need to learn to adopt to the growing online challenge, said Surtees.

“The most successful traditional organizations will be those that can bring their content over to online consumers,” he said.

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