Radio Online Ad Revenues On The Up-And-Up

According to a report by Borrell Associates on behalf of the Radio Advertising Bureau, radio gained digital share in 2012, and many stations are building on that momentum in 2013. Moreover, there appears to be significant profit in local digital sales operations, the report concludes.

The report, Benchmarking Local Radio Stations’ Online Revenues, says that radio grew its online ad revenues 22% last year, outpacing the 20% overall increase in local online ad expenditures. That was enough to achieve a share increase of two-tenths of a point, to 2.0%.

Based on Borrell's annual industry-wide survey on more than 6,200 local online operations, this report analyzes data from media ad revenue, local business ad spending, and a special radio manager survey about digital revenue resources, sales methods, expenses and other digital operations.

Overall, radio sellers closed $370.7 million in local online advertising last year. The report expects the number to pass $420 million this year, as many radio groups double down on digital sales efforts. Much of that growth will be fueled by stations budgeting for unusually high growth. In a survey of 1,075 radio stations administered in January as part of the report, 17% said they expect growth of 30% or more this year.

The growth signals a boost for the radio industry, which had lost digital advertising market share for three years against aggressive sales from newspaper, TV, yellow pages and Internet pure play competitors. The results offer strong evidence that radio is turning the corner in digital sales, according to the report.

Gordon Borrell, CEO of Borrell Associates, notes that "... quite a few (radio) groups are breaking out and even challenging their newspaper and TV competitors for a slice of the very large digital pie... it is entirely possible to generate millions in digital sales... (with a) high likelihood that these sales hold significant profit margins..."

Stations are diverting their focus from banner advertising and branching out to sell other, more popular formats like email advertising, paid search and video ads. While banner ads were the largest single source of revenue for 32% of the stations who participated in the survey, the number drops to 22% for 2013.

Erica Farber, president and CEO of the Radio Advertising Bureau, concludes that "... revenue opportunities continue to grow for those who are pushing the digital limits with online and mobile initiatives... as radio... focuses on monetizing their digital platforms... we will... see growth for radio in revenue and market share..."

For more information from the Radio Advertising Bureau, please visit here.



2 comments about "Radio Online Ad Revenues On The Up-And-Up".
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  1. Gary Rosenberg from My In-House Agency, March 8, 2013 at 8:35 a.m.

    Online radio revenue is often fueled by a media group's insistence on "shaving" 10% off of your radio schedule to go for streaming.

    A client isn't "paying" for the streaming, yet it falls to "digital revenue" solely as a means to please Wall Street.

    Certainly, there are some media companies that do a very good job monetizing their stations' websites, but it is wise not to completely believe that these growth percentages don't contain a certain amount of smoke and mirrors.

  2. Edmund Singleton from Winstion Communications, March 9, 2013 at 3:54 a.m.

    There are a lot of top news stories that I understand better when its reported on the radio, cable news tend to show a lot of clips and should have the courtesy to date stamp them...

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