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.