Broadcasting (July - Dec 1938)

This Broadcasting Business * No. 2— Geographical Distribution of Radio Sales: 1935-1937 By DR. HERMAN S. HETTINGER, Ph.D. Wharton School of Finance and Commerce University of Pennsylvania HOW have different portions of the country fared as to radio advertising volume since 1935? Does the apportionment of the radio advertising dollar among the different states change much from year to year? How is radio advertising divided in some of our major markets? These are some of the questions which the current portion of the analysis of the recently released FCC figures as to the broadcasting business attempts to answer. Important conclusions which can be drawn from the accompanying tables are as follows: 1. The greatest increase in radio advertising since 1935 has occurred in the agricultural portions of the country and in a few compara * Second of a series of analyses of broadcast operating statistics for 1937, based on data compiled by the FCC for that year and shoiving trends since the 1935 survey of the Department of Commerce, The writer, radio's first economist, is former director of research of the NAB and the author of several volumes dealing with broadcast economics. tively undeveloped sections. For the most part, it has paralleled roughly the growth of the agricultural income. Whereas, the net sales of stations as a whole rose approximately 56% since 1935 (as against 48.6% for the medium as a whole), radio volume in the West North Central States gained 72%, increased 71% in the West South Central States, and increased 70% in both the South Atlantic and Mountain States. 2. The greatest gains were in the following States: Nebraska, 116%; Louisiana, 112%; Florida, 97%; West Virginia, 94%; Connecticut, 86%; Minnesota, 85%. The increase in Connecticut can be partly explained by the placing of WTIC, Hartford, on full-time operation shortly before the beginning of the period under consideration. Undoubtedly part of the gain in Florida was due to a rise in tourist business during the winter months. 3. The fact that radio advertising grew earlier and more rapidly 1937 RADIO ADVERTISING In Leading American Markets1 Market Net Sales Rank (net sales ) Rank ( buying power)3 % TOTAL TIME SALES National ■ and Regional program & talent to total net sales4 Net Non work network Local $8,656,665 1 1 29.7 34.8 35.5 8.7 5,673,617 2 2 20.0 45.8 34.2 9.9 4,003,466 3 14 54.7 38.3 7.0 8.6 3,020,019 4 6 30.7 36.5 32.8 6.7 2,828,256 5 4 25.9 17.3 56.8 8.0 2,470,147 6 3 28.7 25.6 45.7 8.7 2,243,548 7 5 33.8 12.5 53.7 3.1 2,043,492 8 8 24.0 33.2 42.8 10.0 1,917,352 9 10 26.6 19.8 53.6 8.9 1,650,932 10 11 21.0 36.6 42.4 10.9 1,604,920 11 9 35.4 18.3 7.0 8.6 1,592,564 12 7 33.5 24.2 42.3 2.6 1,246,400 13 13 31.6 21.0 47.4 2.4 1,200,525 14 16 37.3 33.0 29.7 8.7 1,153,123 15 20 29.2 24.5 46.3 8.7 1,103,862 16 35 29.2 55.9 14.9 8.8 1,082,964 17 15 29.5 10.2 60.3 4.2 980,340 18 39 34.3 6.7 59.0 4.9 956,560 19 12 19.7 41.3 39.0 1.2 882,001 20 21 31.9 30.1 38.0 16.5 818,261 21 19 24.6 25.8 49.6 9.5 816,723 22 27 33.9 31.8 34.3 4.1 786,144 23 28 40.5 16.5 43.0 7.7 736,075 24 24 33.0 39.4 27.6 1.5 720,123 25 33 31.0 47.4 21.6 0.2 714,157 26 22 36.1 33.0 30.9 0.1 665,826 27 23 23.8 33.3 42.9 5.8 655,456 28 34 29.0 35.2 35.8 3.3 652,063 29 41 31.3 27.8 40.9 5.4 637,932 30 45 35.1 34.7 30.2 7.0 _ 627,445 31 25 37.5 32.0 30.5 2.7 618,663 32 18 30.3 37.2 32.5 2.0 498,467 33 49 16.8 38.5 44.7 8.6 470,721 34 29 21.8 30.6 47.6 7.2 468,263 35 31 25.5 30.0 44.5 0.6 465,866 36 65 38.1 24.1 37.8 12.5 299,044 37 32 23.4 19.6 57.0 7.1 97,866 38 1.1 24.8 74.1 2.7 metropolitan districts with more than two stations in t on the Pacific Coast than in other portions of the country and, therefore, has more nearly approached saturation, explains the 19% increase which has occurred since 1935 in California. A generally similar situation is also to be noted in some of the more important New England and Middle Atlantic States. 4. In spite of an increase in the number of commercial stations in operation from 564 to 624, and a 56% rise in station receipts, the distribution of the radio advertising dollar among the various states has changed but little since 1935. The radio dollar follows markets more than anything else. In 1935 the correlation between national and regional time sales and New York, Northeast New Jersey Chicago Cincinnati Detroit Los Angeles St. Louis Pittsburgh Minneapolis-St. Paul _ Cleveland San Francisco-Oakland Baltimore Kansas City, Mo.-Kan. Buffalo-Niagara Des Moines, la. Washington, D. C. ___ Albany-SchenectadyTroy Milwaukee Dallas. T. Seattle, W. Portland, O. Providence-Fall RiverNew Bedford Atlanta Rochester Louisville Houston Oklahoma City San Antonio Nashville Omaha-Council Bluffs New Orleans Fort Worth Columbus Memphis Spokane Birmingham Allentown-Eas tonBethlehem, Pa. lThis includes only Among the first 38 metropolitan districts, according to buying power, are the following which have only two stations : Indianapolis, Denver, Toledo, and Akron. -These markets are metropolitan districts as defined by the 1930 Census. :Rank in buying power for the consumer trading area as set forth in the International Magazine Company Buying Power Index. While not completely comparable to metropolitan districts it is enough as to make the comparative rankings significant. 'While this item is labelled "talent and miscellaneous sales" on the FCC summaries, the vast majority of it undoubtedly represents talent and program sales. retail trade by states was 83.4% and for local time sales 79.2%. 5. With the exception of clearchannel stations located in smaller cities and trading areas, radio advertising by markets closely follows buying power. The first 25 cities as to radio advertising volume include 20 of the first 25 cities as to buying power, rated according to International Magazine Co.'s Buying Power Index. 6. The influence of the use of clear channel stations for regional coverage is illustrated in the relative ranking of a number of clearchannel station cities as to radio advertising and buying power respectively. Cincinnati ranks third in radio receipts and 13th in buy (Continued on page 22) GEOGRAPHICAL DISTRIBUTION Of Broadcasting Station Net Sales States Station1 1937 Net Sales UNITED STATES $81,649,718 New England $ 5,330,092 Maine ) New Hampshire > 600,830 Vermont > Massachusetts 2,977,308 Rhode Island 646,335 Connecticut 1,105,619 Middle Atlantic $17,926,589 New York 9,660,264 New Jersey 2,914,967 Pennsylvania 5,351,358 East North Central $19,990,231 Ohio 7,074,042 Indiana 1,457,829 Illinois 6,180,421 Michigan 3,714,294 Wisconsin 1,563,645 West North Central $9,785,444 Minnesota 2,042,269 Iowa 1,821,734 Missouri 3,473,621 North Dakota 384,025 South Dakota 236,223 Nebraska 1,096,369 Kansas 731,203 South Atlantic $7,699,189 Maryland ) )■ 1,411,852 Delaware I District of Columbia 1,082,964 Virginia 923,409 West Virginia 670,635 North Carolina 1,123,457 South Carolina 329,292 Georgia 1,015,856 Florida 1,141,724 East South Central $3,288,809 Kentucky 950,033 Tennessee 1,570,134 Alabama 556,225 Mississippi 212,417* West South Central $6,266,211 Arkansas 302,280* Louisiana 1,050,722 Oklahoma 1,188,873 Texas 3,724,336 Mountain $3,027,614 Montana Idaho Wyoming Colorado New Mexico Arizona Utah Nevada 361,185 193,335 1,126,634 210,559 333.629 802,272 Estimated1 % Gain Over 193 5 56 46 53 36 31 86 57 74 22 53 54 60 74 59 31 54 72 85 55 65 50 81 116 92 71 84 46 71 94 68 75 72 97 54 27 74 28 56 70 67 112 51 68 70 73 50 70 53 61 % Total 1937 % Station Time1 Sales: 1935 100.0 6.53 7.00 .48 | .74 .12 .75 .15 ) 3.65 4.17 .79 .95 1.35 1.13 21.95 21.77 11.83 10.57 3.57 4.56 6.55 6.64 24.49 24.86 8.66 8.46 1.79 1.63 7.57 7.38 4.55 5.43 1.92 1.96 11.98 10.86 2.50 2.11 2.23 2.24 4.25 4.07 .47 .49 .29 .25 1.34 .97 .90 .73 9.39 8.62 1.73 1.67 1.33 1.51 1.13 1.03 .82 .66 1.38 1.27 .36 .35 1.24 1.12 1.40 1.11 4.03* 4.09 1.16 1.43 1.92 1.72 .68 .68 .26 7.68 7.03 .35 1.29 .94 1.46 1.50 4.56 4.24 3.71 3.36 .44 .40 .24 .24 1.38 .26" .41 .98 1 .13" / 1.13 .09 .42 .95 Pacific $8,335,539 45 10.21 12.31 Washington 1,831,996 66 2.25 2.11 Oregon 998,432 44 1.22 1.32 California 5,505,111 19 6.74 8.88 'Net sales, as used by the FCC, are gross sales less customary promotional discounts as well as agency commissions. =FCC figures for 1937 and Census of Business data for 1935 have been compiled on a slightly different basis so that only a rough comparison is possible between them. FCC net sales are as defined previously and include talent as well as time sales. The 1935 state figures are gross receipts by stations from the sale of time only, but before agency commissions have been deducted ; this being a more conventional method of treating sales though not necessarily a more logical one. It has been necessary to put data on a comparable basis as far as possible. Since this could not be accomplished completely the resulting percentages of growth since 1935 are in the nature of estimates. However, they are sufficiently accurate to indicate general trends. 3Time sales only ; prior to deduction of agency discounts. 4Combined with Arkansas (Estimated .27). 'Combined with Mississippi (Estimated .36). "Includes Nevada. 'Combined with New Mexico. "Combined with Wyoming. Page 20 • September 1, 1938 BROADCAST IN G • Broadcast Advertising