By David B. Wilkerson

CBS Radio sees revenue improvement in the third and fourth quarters of this year, led by a resurgence in automotive advertising, according to the division's chief executive.

"We believe that the advertising climate is improving, and the numbers are pointing that way," CBS Radio CEO Dan Mason said in an interview.

In the second quarter, revenue at CBS Inc.'s (CBS) radio division fell 23% to $322 million, an improvement compared with a 29% decrease in the first quarter.

"And we expect to do better in the third quarter, and then better in the fourth," Mason predicted.

As he indicated in a May interview, Mason said there are fewer radio commercials available in the marketplace than the past and more demand for the spots that are for sale.

"Automotive has come back," he said. "We benefited from cash-for-clunkers, and we expect to benefit even more in the next round."

The federally funded Car Allowance Rebate System, which began in late July, offers consumers up to $4,500 to exchange older, less fuel-efficient vehicles for new, more fuel-efficient ones. According to the U.S. Department of Transportation, more than 273,000 vehicles nationwide have been traded in through the program, usually referred to as "cash-for-clunkers."

Congress approved another $2 billion in funding for the program last week.

Movies and other forms of entertainment have also been consistently strong ad categories for the division, Mason said.

CBS Radio is also being helped by format changes, he said. About 20% of the group's stations have switched formats since early 2007.

Changes have lifted revenues at CBS FM stations in the top three U.S. markets - New York, Los Angeles and Chicago.

KAMP-FM in Los Angeles, referred to as Amp Radio, continues to gain more listeners among adults 18 to 34 years old, as well as the traditional target audience, people 25 to 54. Also improving are Now FM (WXRK-FM) in New York and B-96 (WBBM-FM) in Chicago.

All three stations have been rebranded to CBS's version of the Contemporary Hit Radio, or CHR, format, which emphasizes newer Top 40 songs.

"The goal there was to put CHR formats in the top three markets, to make the clusters (of stations in those areas) a better advertising vehicle for 18- to 34-year-old women, which I think we've accomplished," Mason said.

Mason gives much of the credit for ratings improvement at the CHR stations to Arbitron's (ARB) Portable People Meter, or PPM. The device, about the size of a small cellphone, can track when and where participants listen to radio or watch television, as well as how they interact with other forms of media and entertainment.

The meters are designed to replace the traditional method, in which people write down what they listen to or watch in a diary.

While some groups oppose PPM on the grounds that it allegedly undercounts minority listeners, Mason says it has proven invaluable in counting young people, who are usually thought to have bypassed radio in favor of MP3 players and Internet-only stations.

-David B. Wilkerson; 415-439-6400; AskNewswires@dowjones.com