So says a new report from BIA/Kelsey, “Local Radio Stations Profiles and Trends for 2014 and Beyond,” which indicates local radio stations have the fourth largest share of local ad revenues behind direct mail, newspapers and television.
“The local radio market is growing, albeit at a more moderate pace than it once did, by expanding its offerings to off-air platforms, providing a wider range of listener experiences and advertiser opportunities,” according to the report.
Defining the local media marketplace as all local media/services that provide access to local audiences, BIA/Kelsey estimates total local media spend for 2013 to be $132.7 billion. Local radio stations receive 11.5% of all ad revenue being spent in local markets, fourth amongst all local media segments, behind direct mail (27.2%), newspapers (16.1%) and TV (14.9%).
Local radio pulls more than 10% of its advertising from five ad categories: retail (18.0% of total radio industry revenue), financial/Insurance (17.0%), restaurants (14.5%), automotive (14.0%) and technology (10.0%).
Local radio stations receive 14.3% of all advertising spent by finance and insurance companies and 12.1% of all ad spend by restaurants.
Another indication of the success of radio’s performance is the recent increase in values of publicly traded radio companies. Like other local media companies, values of public radio companies have increased by 68.2% through the first three quarters of this year. However, as competition for audience share continues to cut into audience share, the industry needs to be on its toes to remain competitively viable, warned the report.
“As we move toward 2014, it’s clear the radio industry has adapted to incredible competition from all sides, with streaming and other audio competitors taking audiences,” said Mark Fratrik, chief economist and report author, BIA/Kelsey. “Yet local radio is surviving, and in some instances, thriving, and poised to compete well in the new marketplace. Radio is also beginning to deliver other compelling digital services that help its local advertisers navigate promotional opportunities. With the right attitude towards the new reality of increased competition and strategic planning, local radio stations can prosper.”