Clear Channel Proves Point About Radio Ad Clutter

17 August 2005

It's good to be proved right. But less pleasing when your verisimilitude results in a deflated bottom line.

As happened at America's largest radio company Clear Channel Communications, which last summer decided to limit the number and duration of commercials in a bid to counter declining audience numbers [WAMN: 20-Jul-05].

Last week radio measurement specialist Arbitron reported that Clear Channel audiences grew by a healthy 14.5%. The downside is that advertising revenues fell by 6.5% in the second quarter.

The broadcaster blames this on a slower than expected shift from 60-second to 30-second ads.

President/ceo Mark Mays told analysts in a conference call: "We are building a new 30-second marketplace, which continues to move forward, albeit slower than we would hope. Our clutter reduction program lays the foundation for the future of Clear Channel Radio."

Clear Channel's less-is-more policy has its critics. "There are advertisers who just won't be pushed into a 30-second spot and, because Clear Channel now has fewer of those, that money is moving to competitors," observes Soleil/Media Metrics' Laura Martin.

"It's a competitive world and competitors are then saying 'Hey, stay with us'."

Data sourced from AdAge (USA); additional content by WARC staff