RAB Sees Radio Digital Sales Hitting $520 Million
     

This story has been updated.

With a digital revenue increase of 15% in 2013, digital radio revenue is poised to grow 22% this year — surpassing the half-billion mark in digital advertising for the first time — according to a report from Borrell Associates on behalf of the Radio Advertising Bureau.

The average station made $166,490 in digital advertising, or about 3% of its total revenue, according to the findings in “Benchmarking: Local Radio Stations’ Online Revenues.” Some large-market stations are making millions and the average revenue for four-station clusters is approaching three-quarters of a million dollars, according to Borrell.

Overall, radio sellers closed $426.3 million in local online advertising last year according to Borrell Associates. They expect the number to hit $520 million this year as many radio groups expand into selling fast-growing digital services. Those services, popular among local marketers, include app development, search engine optimization and social media and email management. Based on the report, one-third of station groups have expanded into those offerings.

Gordon Borrell, CEO of Borrell Associates, sees positives. “We’re still seeing three-fourths of the managers say they believe digital sales hold a lot of growth potential, and now we’re seeing some clear suggestions on how to tap it. Training is an opportunity, as is the need to get more buy-in from upper management. Apparently, the rank-and-file are trying to get the word back to the general that there’s gold in them thar’ hills.”

Along with benchmarking, the report offers insights into what radio managers are thinking with regard to their digital ventures. The majority of managers (62%) believe their sales reps are talking to the wrong buyers when trying to sell digital and an overwhelming majority (92%) believes that more training would help boost digital sales at their stations.

“We’re experiencing year-over-year double digit growth in radio; and to truly maximize this revenue stream this survey continues to provide us with areas to improve upon and ultimately grow our overall revenue share,” says RAB President/CEO Erica Farber. “Most notably, sales managers are looking for continued training for their sales staffs and a better understanding of the digital buying community.”

The report is based on Borrell’s surveys of 7,400 local online operations in the U.S. and Canada, including 2,790 radio stations in 751 clusters. This report analyzes data from three principal sources: ad revenue as reported by the stations, local business ad spending and a radio manager survey asking questions about digital revenue resources, sales methods, expenses and other digital operations. This year’s manager survey is comprised of 294 respondents representing 2,010 stations.

The study is available to RAB members on RAB.com. A webinar featuring the study results, presented by the RAB and Gordon Borrell, is also available.

 


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