Sponsorship boosts radio as ad spend nears £600m mark

Despite concerns of a slowing down in the world economy, the fourth

quarter of 2007 was radio's best-performing quarter in almost two years,
with revenues of £150.9m.

National stations' ad revenue grew by 11.3% year on year to £83.3m, while sponsorship and promotions revenues reached its
second-highest quarterly figure of £27.4m. Its highest sponsorship
and promotions figure of £28m was recorded in Q3 2007.

RAB managing director Simon Redican said a "back to basics" approach to
ad sales had helped the radio industry to boost ad revenues.

He said: "We're having more conversations with clients and agencies in
years. The phrase we're using is 'cautious optimism'. It's starting to
go in the right direction."

Howard Bareham, MindShare's head of radio, said commercial radio was
beginning to reap the benefits of closer cooperation. "Radio stations
realise they have to create more of a unified front," he said. "Sales
groups are getting savvier about how they position and sell radio."

Bareham predicted radio ad spend will rise by 2% this year, but he
warned that the expected wave of radio M&A this year could prove
distracting to radio sales operations.

He said: "What's happening with GCap will come to a head soon. And
you've got Virgin Radio on the table. The next six months will be
telling in terms of the structure of ownership."

Meanwhile, the RAB figures reveal a stronger 2007 for national stations
compared with their local counterparts. National ad spend was £83.3m in Q4 2007, versus £74.8m in the same period in 2006, while
local ad spend was £40.2m in Q4 2007, compared with £38.9m
in Q4 2006.