Radio’s Future Revenue Focus: Digital
Dollars
By
February 5, 2019
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.
• 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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