Radio station executives tend to be of two minds when it comes to alternative revenue streams. Some feel that it’s common sense to capture these “non-traditional” dollars as long as it doesn’t damage the brand, while others remain concerned that the effort takes away from the core business of selling on-air commercials. The pendulum has now swung again toward expanding beyond broadcast revenue. The challenge is to do so with a small, often under-compensated sales staff.
Digital sales
According to the IAB, digital ad revenue in 2024 surpassed $258 billion, a 14.9% increase over the previous year. Many radio stations are selling geo-targeted video ads that run on social media and websites; however, some account executives are struggling to make the leap into digital ad sales. Some think it shouldn’t even be in their job description, while others say it’s too much work for too little return, but this can change. And it needs to be clear to new hires that digital media is a key part of their salary and job performance review.
Proper training and financial incentives will instill or restore confidence and enthusiasm. For example, account executives new to selling digital packages should be armed with spec spots specific to the advertiser they’re approaching. New AI-based tools now on the market make creation of spec spots easy. One positive reaction from a client will forever change their attitude.
Streaming
If your live stream doesn’t have a title sponsor, get to work. Also, consider selling the spots in the stream separately from your broadcast ads. Why should your on-air advertisers receive this reach for free? Listen to how noncommercial WXPN in Philadelphia effectively monetizes their stream with pre-roll and insertions.
Branded products
I recommend this only for stations who truly know listeners are passionate about your station and your personalities. T-shirts, hats and bags will sell consistently, but those numbers will be small unless you have massive events where you can truly monetize. The key is minimal investment in time and resources. Find a company that prints on demand so you have little up-front cost and a revenue share deal. There are several vendors to choose from. Use your website, social media channels and videos to advertise your products.
Concerts, live podcasts, events and seminars
Whether in huge or small venues, concerts typically rely on finding someone else to take the investment risk, while your role is promotion and selling sponsorships. For small venues, consider a “series,” where a discounted ticket gets listeners in for one price to all the shows. At first I was skeptical, but it’s abundantly clear that people will pay to watch a podcast or a live broadcast at a nice venue. Watching NPR’s “Wait, Wait, Don’t Tell Me” is not a cheap date night.
Credit: Wait Wait Facebook page
For sustainable revenue beyond spot sales to become successful, management must come to terms with the idea of expanding compensation. Great salespeople don’t cost stations money. The more money the sales executive makes, the more the station makes. If you want to ensure your non-traditional projects succeed, pay a higher commission on those sales than you do for broadcast commercials. This incentive will drive action.
The question isn’t whether radio can generate alternative revenue; it’s whether management will create the conditions in which sales teams are motivated to pursue it. The stations that get this right will transform challenge into opportunity.
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