According to the latest revenue figures from the RAB, radio advertising totalled £598.2m in 2007, up 2.8% on the previous year and nudging close to the psychologically important £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.
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