Browser Displacing Dial, Digital Pumping Up Radio Volume

Digital ad sales pumped up what otherwise would have been an essentially flat over-the-air radio industry in 2012, according to a new analysis from media industry consultancy BIA/Kelsey. The report, “Investing In Radio Market Report,” estimates that total over-the-air radio revenues “inched slightly upwards” to $14.3 billion, a 1.5% gain over 2011.
 
The analysts said the sluggish terrestrial radio performance was due to two factors: Slow overall economic growth and the fact that the revenue mix at local radio stations is shifting toward online.
 
“Income from online advertising is expected to rise at a rate of about 10.8 percent annually over the next five years versus 2.5 percent from over-the-air,” the report projects -- estimating that in 2012, online radio ad revenues rose to $491 million, representing 3.3% of the total radio advertising pie.
 
“Markets such as Boston saw 14.2 percent in online radio revenue with overall numbers rising by 3.6 percent,” the report said, projecting that online radio ad revenues would nearly double to $818 million by 2017.
 
“As the digital marketplace continues to rise in all sectors of advertising, radio is improving its listener engagement online and benefiting from the value of its web and mobile assets,” stated Mark Fratrik, vice president and chief economist, BIA/Kelsey. “Overall, the industry is still recognized as an important part of the media mix as it continues to meander around, rising slightly with the rate of inflation but not keeping up with the economy.”

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