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About The List Radio stations expect to weather economic storms



Revenue Increases Recently Reported

The dark cloud hanging over the economy doesn’t seem to be bringing a downpour on the local radio industry.

With consumer confidence down and the threat of a recession looming, local radio stations are confident they will stay afloat and local advertising spending will be up, along with an increase in audience listeners.

The San Diego Business Journal’s List of Area Radio Stations features 25 stations ranked by the total listening audience based on Arbitron ratings.

While no industry is immune from an economic downturn, “radio usually does a fairly good job sustaining the big drops and holds up better locally,” said Mike Stafford, general manager of Jefferson Pilot Communications, which includes stations KBZT-FM, No. 14, KIFM-FM, No. 11, and KSON-FM, No. 8 on The List.

The revenues were up for the stations by roughly 6 to 7 percent through February, he said.

Traditionally, radio has fared better in slower economic times than other mediums such as television and print for several reasons.


– Radio Ads Can Be Less Expensive

Cost of commercial time and production is substantially lower than electronic media.

The average cost for producing a radio commercial in San Diego can range anywhere from $100 to $450, according to Sharon Massey, director of marketing for the San Diego Radio Broadcasters Association. This is a bargain compared to the thousands of dollars spent for television ads.

Production time is quick and easy to facilitate, and because most stations target a specific audience in age or interest, advertisers have the advantage of being able to market their service or product to a concentrated group rather than to a broader audience that is reached through television or print.

“Radio has a long history people trust the medium. It’s efficient, can move quickly and can target an audience,” Stafford said.

Whatever the case, figures indicate that San Diego continues to be a relatively healthy marketplace in comparison to other cities.

According to Miller Kaplan Arase & Co., CPAs, a Los Angeles-based accounting firm, continued growth in radio revenue for 2001 is anticipated.


– Revenues Up Since Last Year

Its recent Market Revenue Report showed that San Diego radio ended 2000 with a 16.4 percent increase over 1999 revenue, surpassing the national average of 12 percent. Automotive dealers continued to be among the top advertising spenders in San Diego radio, with increases shown in the food industry, real estate and nonprofit/government agency industries.

Despite the decrease in spending on dot-com ads, which were dominant in 2000, local radio revenues posted a 9.2 percent gain in January 2001 over the same period last year.

But the good news doesn’t indicate that there won’t be some pessimism in terms of the outlook for 2001.

“Businesses try to be more efficient with the advertising dollar when things slow down consumer confidence is dropping so you see people spending less money,” Stafford said.

He said that while there is always a potpourri of advertisers doing business with his stations, the amount of dot-com ads had noticeably dropped.

Peter Moore, general manager for the Hispanic Broadcasting Corp., which includes KLNV-FM, No. 18, and KLQV-FM, No. 23 on The List, didn’t feel the effects of the dot-com drop.


– Dot-Coms Chose Different Markets

In the years 1999 and 2000 no dot-com advertisers came to his station because they lacked confidence in the Hispanic market, he said.

He added that while the approach was wrong, the result was positive because he didn’t have a big drop in advertising revenue when the dot-com ads slowed down.

“I didn’t have it quite as good, but now I don’t have it quite as bad,” he said.

A whole crossover of various industry groups is occurring slowly as local advertisers grow to have confidence in the stations, he said.

“(The) Hispanic market is growing, especially in Southern California, which will be very meaningful to advertisers,” Moore said. “If you want to be successful, you can’t ignore 25 percent of the population.”

Fast food and automotive companies have always been great supporters, he said, but added he’s also seeing more ads from financial and computer sales industries progress onto the airwaves.

Being directly located in San Diego puts the KLQV-FM and KLNV-FM stations at an advantage over the 30-plus competing Spanish-language stations in Tijuana because they are available to the listeners directly, Moore said.

“It’s important to be in the street and touching listeners,” he said.


– Events Used To Promote Stations

Since the stations have only been around since 1998, Moore said they often market themselves aggressively by putting on events such as Cinco de Mayo and KGB Sky Shows, and taking an active role in the Hispanic communities.

Hispanic Broadcasting Corp. recently added Dia del Ni & #324;o, a children’s festival held in partnership with SeaWorld San Diego, to be held in April.

The number of listeners for KLQV-FM increased from 84,500 in 1999 to 93,800 listeners in 2000.

“It’s been a great two years for us. We’re being asked to participate in a lot of things,” he said.

The years have also been great for public radio station, KPBS-FM, No. 16, with the number of listeners up from 154,100 in 1999 to 164,000 listeners in 2000.

Tammy Charnow, public information director for the station, attributes the increase to audience loyalty and changes in the format.

Since 1993, KPBS-FM has hired new reporters to cover more beats, brought in new hosts and worked to create a more news and information balanced station, she said.

“There are fewer and fewer news outlets than there have ever been, so more people are tuning in,” Charnow said.

“We’re very reliable and very fair, so listeners know they can tune into the quality of our product.”

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