Radio’s Future Revenue Focus: Digital Dollars

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Local radio stations generated $804 million in digital ad revenue in 2018. They are forecast to make $949 million this year, a report released Tuesday by the Radio Advertising Bureau and ad-tracking firm Borrell Associates finds.


Radio’s “attitudes toward digital strategies improving and industry revenues” are fast approaching $1 billion, the RAB and Borell note.

Local radio stations generated $804 million in digital ad revenue in 2018. They are forecast to make $949 million this year, the report says.

The report showed that the average station earned more than $250,000 in digital revenue in 2018, up 15% from the previous year.

Further, the research shows that digital revenue will surpass 10% of the average station’s ad revenue this year.

“Some stations are exhibiting remarkable performance,” the RAB notes. “The research shows that top-performing market clusters get three to five times the market share of peer stations.”

The findings are a part of the RAB and Borrell’s seventh annual report on how radio’s digital efforts are faring, “Radio’s Digital Sales Inch Closer to $1 Billion.”\

Borrell Associates CEO Gordon Borrell commented, “This year’s findings quantify that there’s great upside potential. Nearly all radio buyers are also buying digital advertising, yet only 1 in 4 of a typical station’s customers is buying digital products from the station. Closing that gap represents a big opportunity.”

Released today to RAB members, the report analyzes online ad revenue from 3,121 radio stations, as well as survey responses from 1,715 local radio buyers and a survey of 132 radio managers.


Among the findings:
•    97% of radio advertisers buy digital advertising with traditional forms of advertising in their marketing campaigns, up from 85% a year ago.
•    25% of the average station’s radio customers buy digital advertising from the station.
•    Streaming-video advertising is gaining high interest. Among radio buyers, 27% already buy it and 9% more plan to start.
•    Attitudes toward digital strategies have improved. Managers who believe their station’s strategy is good has grown from 49% to 72% over five years.
•    57% of stations report that they include digital products with every sales pitch.
•    Depending on market size, the average radio cluster gets between 1.0% to 6.6% of the addressable digital market. Best-practice market clusters get four to five times that.


 

“Digital has been integrated into all facets of broadcast radio’s offering both in programming and sales, and the results are definitely paying off,” said RAB President/CEO Erica Farber.  “As radio continues to provide integrated marketing solutions to its advertisers we expect to see continued growth. Broadcast radio has been focused on digital’s integration into its overall offerings and as this year’s study reveals, we continue to see growth and attributable results.”

 


The full report is available to RAB members on RAB.com. Live webinars featuring the survey results presented by the RAB and Gordon Borrell are available on February 12 or February 14 for free to RAB members and survey participants. 

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