RADIO—Frequency of L.A.’s Radio Ads Soaring

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Radio stations throughout Los Angeles are sharply expanding the amount of airtime devoted to advertising, as a softening ad market is resulting in lower ad rates that requires stations to sell more time to meet revenue goals.

The biggest increase in commercials is taking place during weekday morning “drive time” from 5 to 9 a.m, according to several industry analysts. The challenge these stations face is attracting additional listeners while satisfying the demands of advertisers.

“We are not happy with longer (commercial) breaks, because both listeners and advertisers don’t like a lot of clutter,” said Amy Nizich, executive vice president at Initiative Media North America, a giant media-buying firm in Los Angeles. “I’ve been doing this for a long time and the increase in commercials concerns me.”

Nizich believes local AM stations always have been able to air more commercials per hour because of the talk, news and sports formats that dominate the industry. But FM radio, with its mostly music formats, has been hurt by airing additional commercials.

“The increase can be heard in morning drive more than in other day parts, because the shows are personality-driven, which tends to lead to more commercial breaks,” Nizich said.

During one recent 5-6 a.m. segment on KFI-AM (640), for example, 24 minutes of commercials ran, along with just 21 minutes of programming from Bill Handel, who hosts the station’s morning talk show. On average, KFI only runs about 14 minutes of commercials per hour of air time.

“I’m not thrilled about all the commercials,” said Handel. “But with all the consolidation in the radio industry, there is a need for more revenue.”

(KFI is owned by San Antonio-based Clear Channel Communications Inc., which owns and operates 1,170 stations nationwide.)

Roy Laughlin, market president for Clear Channel in Los Angeles, declined to comment.


Show host’s warning

Handel said that while KFI has established itself as a credible ratings success for both news and talk show programming, at some point the station will feel the ill effects of running too many commercials.

“The audience for AM radio has dipped over the past few years,” said Handel. “I’m not sure if it’s because of the commercials or other factors, but increasing the number of commercials is not going to help us attract an audience.”

Even radio executives concede they channel surf to skip out on long commercial breaks.

“It all depends,” said Erik Braverman, program director at KABC-AM (790) and KSPN-AM (1110). “If I’ve been teased well enough about what is coming up after the break, I’ll stay with the station. I have a 15-minute drive to work, and on some days, the commercial break will last the entire commute.”

Meanwhile, KFWB-AM (980) recently aired more than 20 minutes of commercials during its 5-6 a.m. hour. KPWR-FM (105.9) had a drive-time commercial set with 11 minutes of back-to-back commercials, including four different automobile ads, according to Don Barrett, executive editor of LARadio.com, which tracks local stations.

Multiple ads from a single industry sector within the same commercial break is a frequent phenomenon, as competitors look to counter each other’s pitches. During the 11-minute KPWR commercial break, listeners heard 60-second commercials from Puente Hills Volkswagen as well as from Universal City Nissan, and from Washington Mutual as well as Bank of America.

It’s all aimed at growing the bottom line in a tough environment.

“After enjoying record advertising revenues last year, many local stations are hoping to once again increase revenues in a soft advertising market by airing additional commercials,” said William Meyers, a media analyst with Lehman Brothers, and author of the book Radio Industry: The Ratings Report Card.

Topping year 2000 ad revenue levels this year would be a monumental feat, industry observers said.

The top-billing L.A. station last year was KIIS-FM, whose $44.5 million in ad revenues accounted for 5.6 percent of the L.A. radio market total, according to Duncan’s Radio Market Guide. Rounding out the top five L.A. stations, in terms of ad revenues, were KTWV-FM ($41.9 million), KLSX-FM ($39.8 million), KROQ-FM ($38.0 million) and KKBT-FM ($37.0 million).

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