BIA/Kelsey: Markets and Formats Can Play Role in Ad Share - Radio World

BIA/Kelsey: Markets and Formats Can Play Role in Ad Share

Stations in the largest markets receive a disproportionate share of ad revenues, according to report
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One in a series this week delving into the recently released report “The Position of Local Radio Stations: Trends for 2016 & Beyond.”

Since 2010, total radio advertising revenues have bounced back from the previous recession years. Online and digital revenues have shown stronger growth than over-the-air ad revenues, which have been holding steady or slightly decreasing.

According to the report “The Position of Local Radio Stations: Trends for 2016 & Beyond” by research and advisory firm BIA/Kelsey, in 2015, over-the-air ad revenues declined by 1.6 percent while online revenues grew by 11.6 percent. “As long as the economy maintains moderate growth over the next few years, we expect total radio advertising to grow in the 1.0 percent to 1.25 percent CAGR (compound annual growth rate) range.”

Market size and music format played a role for advertisers in determining where ad dollars were spent. Radio stations in the largest markets receive a disproportionate share of ad revenues, according to the report. Stations in the top 50 ranked markets make up 19.1 percent of commercial radio stations in the United States, but in 2015 generated 52.8 percent of all over-the-air ad revenues. Being able to reach more people, coupled with people in large markets generally spending more time in their cars, give large markets the advantage. The report states this will change as other audio options, streaming, for example, continue to make inroads.

The number of stations that make up the largest format group is country music at 12.7 percent, followed by Spanish at 10.2 percent and adult contemporary and news, each at 9.8 percent.

But the shares of advertising revenue play out differently. Radio stations airing adult contemporary receive 15.9 percent of ad revenue, followed by country music at 13.4 percent and Christian/top 40 at 12.3 percent and news at 11.6 percent.

Where is that advertising revenue coming from? According to the report, BIA/Kelsey’s Media Ad View Plus service estimates local radio stations receive 14.6 percent nationally of all advertising spending by finance/insurance companies, with automotive close behind at more than 13 percent.

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