A big drop in government advertising helped pull down radio advertising by 13.9% in the third quarter, according to Canadian Broadcast Sales, which represents more than 60% of all private radio revenues.
Most of the drop (82%) resulted from significant declines in four key categories in the March-to-May period.
Spending from all government sources dropped 54%, while federal government spending was down 61% in the quarter—Ottawa’s cuts alone accounted for more than one-quarter of the total decline, according to CBS.
Alcoholic beverages (-32.5%), financial services (-25%) and telecommunications (-20%) all fell well short of revenues generated in the same quarter last year.
Government spending can swing a great deal from one year to the next, depending on what services or products they are promoting, explained CBS president Patrick Grierson. In 2007, for example, government spent about $8.2 million on radio while in 2008 it jumped up to $12 million, he said.
While telecom has “remained quieter than we expected… Automotive is surprisingly strong, despite a huge decline from the likes of GM and Chrysler,” said Grierson.
“It was a tough quarter, but we feel there is more confidence coming.”
The consumer economy is showing signs of improvement, though advertisers continue to hold back spending so it may be a while before radio revenues pick up.
“We’re not yet overly optimistic about Q4 and early next year, but we get the sense that advertisers and agencies are beginning to feel that the worst is behind them.”
In terms of regional spending, Saskatchewan and Atlantic Canada showed fairly positive results, and Quebec was “pleasantly strong,” said Grierson. The picture was very different in B.C., Alberta and Ontario, however.
Ontario has been hard hit during the recession, and that is reflected in the advertising drop in that province, said Grierson.
Fully 41% of the total revenue shortfall can be attributed to reduced spending in Ontario, which still accounted for 33% of total radio spend, measured by CBS.
B.C. had a 17.45% share of that radio market, though spending was down 26%, while Alberta accounted for 21% of all spending, after a 15.5% decline from Q3 last year.
