An Expected Surge For Radio’s Digital Dollars

Gordon Borrell

Radio stations’ digital revenues are poised to surge this year, according to research released jointly Tuesday (2/7) by the Radio Advertising Bureau and advertising research firm Borrell Associates.

The report finds digital dollars growing to a record $753 million — a 22% year-over-year gain for AM and FM broadcasters in the U.S.

The report shows that in 2016 the average radio station generated between $49,159 and $602,783 in digital advertising sales, a wildly varying national figure that largely depends on market size.

The RAB/Borrell report also finds that among the more than 800 clusters, the average market cluster surveyed broke the $1 million mark in digital sales for the first time, reaching $1.1 million.

Among the report’s other findings, in 2016:

• Digital ad sales growth averaged 12% for radio stations.
• Small markets saw far higher growth rates for digital sales – between 36% and 83%.
• 2.5% of market clusters made more than $5 million in digital sales.
• Stations are becoming less dependent on banner ads, selling other forms of digital advertising.
• The vast majority of radio advertisers believe that radio sales reps possess solid marketing and digital skills.

“We’re seeing a lot more optimism from radio managers this year,” said Gordon Borrell, CEO of Borrell Associates. “Twice as many told us they’re planning for growth of 20% to 50% in 2017, so there’s obviously something in the air.”

“We’re starting to see great momentum with digital in both small and large markets,” added RAB President/CEO Erica Farber. “Stations that are evolving their offerings beyond their core broadcast business are seeing revenue benefits.”

This is the fifth year that Borrell has produced the benchmarking report for RAB. The report utilizes Borrell’s database that tracks digital revenue for 10,597 local online operations in the U.S. and Canada, including 3,210 radio stations. It also provides insights from a recent survey Borrell conducted of 2,667 radio advertisers, as well as a 14-question survey of 194 U.S. radio station managers.