Online Advertising Slowly Growing Radio Revenues

Research Brief Online Advertising Wednesday, April 3, 2013 For those radio broadcast companies not in the on-line game game there is significant growth ahead...According to MC Marketing charts reports.."Radio revenues from local online advertising increased by 22% last year to $370.7 million, slightly outpacing overall local online advertising growth of 20%, according to a study conducted by Borrell Associates on behalf of the Radio Advertising Bureau. Radio still accounts for just 2% share of the local online advertising market, which is largely controlled by pure play companies (46.2%) and newspapers (23.6%). Still, almost three-quarters of station managers believe that the internet holds significant potential for their stations." Philip Jay LeNoble, Ph.D. According to the first edition of “Investing In Radio Market Report,” from BIA/Kelsey, radio industry over-the-air revenues inched slightly upwards in 2012, increasing to $14.3 billion, a 1.5% change from the year before. That slight change is due in large part to the sluggish overall economy for 2012 and the increased competition radio faces in the local media market, says the report. The company also notes that station revenue mix will continue to shift somewhat and income from online advertising is expected to rise at a rate of about 10.8% annually over the next five years versus 2.5% from over-the-air. For 2013, BIA/Kelsey forecasts over-the-air radio revenues should see 2.3% growth, or $14.7 billion, again due to the slightly stronger economy. The report shows that in 2012, online radio ad revenues reached $491 million, representing 3.3% for the industry. Markets such as Boston saw 14.2% in online radio revenue with overall numbers rising by 3.6%. The report forecasts radio's online revenue growth will reach $818 million by 2017, while the industry's combined total revenue will reach $17 billion by 2017. Radio Station Revenues 2007-2017 ($Billion) Year Online Revenues Over The Air revenues 2007 $17.9 - 2008 $16.5 - 2009 $13.3 - 2010 $14.1 $0.4 2011 $14.1 $0.4 2012 $14.3 $0.5 2013 $14.7 $0.6 2014 $15.0 $0.6 2015 $15.4 $0.6 2016 $15.8 $0.7 2017 $16.2 $0.8 Source: BIA/Kelsey, March 2013