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AKIRA SUWA / Staff Photographer

Elroy Smith of Radio One manages three Philadelphia stations. "We have to survive. . . . This is no joke," he says.

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Posted on Sun, Jul. 12, 2009

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Cutbacks, double shifts:The static of hard times.

Radio is losing ad dollars, while listening dips slightly

Elvis Duran's New York morning show, which is syndicated to 18 other markets, including Philadelphia, where it airs on WIOQ (102.1), demonstrates how well the old and new can work together creatively.

"We're not purely just a radio show anymore," says Duran. "The Internet is a sidekick to our show. People can look at pictures, read more about things on our Web site. We're very, very active."

But activity doesn't boost the bottom line.

"Streaming, Web sites, and so forth, people know that it's there. They know it has value," says Ellen Drury, president of local broadcast for GroupM Matrix, a major media buyer. "How do you get traditional shops, which have separate online departments, to put it in their buying plans? It certainly hasn't become the revenue stream they hoped it would be."

Radio can claim a more faithful audience than other traditional media, although a new ratings-measurement device has created confusion in the industry.

Weekday newspaper circulation nationwide declined more than 11 percent in the year that ended March 31. Prime-time network TV ratings are down 6 percent since 2006-07, and dropped 16 percent last season in the 18-to-49 age demographic that is the major currency in TV advertising.

In contrast, the radio audience in the Philadelphia area decreased only 3.4 percent over the last two years by a commonly used measurement, the "cume," that calculates the number of individuals who listen to at least 15 minutes of radio per week.

In April 2007, according to Arbitron Inc., the primary provider of radio ratings, 4.45 million different people 6 or older listened weekdays between 6 a.m. and 7 p.m., radio's prime time. In April 2009, 4.3 million tuned in.

The number of people listening in an average quarter-hour decreased from 582,800 to 572,000.

New measuring techniques found a larger cume than anyone suspected, but also revealed that listeners spend less time than previously thought with their favorite stations.

Still, that should not affect ad rates, says Drury, of GroupM Matrix.

"The strong stations are still the strong stations," she says. "Losing a share point here or there, that's not going to kill you."

Flexibility is one of radio's advantages. With more than 100 formats and sub-formats, radio is much more finely tuned demographically than TV or newspapers.

"An advertiser trying to reach the African American community would probably go to Radio One," with stations broadcasting hip-hop, gospel music, and contemporary rhythm and blues, says Mike Gillespie Sr., president and founder of the Gillespie Group, a Philadelphia advertising and marketing company. "If you have a car repair on lower Germantown Avenue, you don't need Cherry Hill."

But such flexibility is no match for an economic crisis of historic proportion, as Radio One's troubles show.

"These are unprecedented times," says Fullam, of Greater Media Philadelphia.

It's tough for anyone who sells advertising. Radio has to navigate the same turbulent economic waters that other media do, explains Jeff Haley, president of the Radio Bureau of Advertising, and the depth of those waters, as measured in advertising revenue, diminished 12 percent in the first quarter of 2009, according to the Nielsen Co.

Not only are fewer people buying advertising, but they also generally are paying less per unit because of the decreased demand. Rates may stay the same, but stations will throw in some free spots to sweeten a deal.