A newly-released benchmark report on the health of the radio industry found that the industry is poised to hit $2 billion in digital sales in 2023 — a figure that is leading some to speculate that digital products may become the industry’s most important avenue for growth.
The report, called “2022 Digital Sales Approach $2 Billion, Driving Half of Radio’s Growth,” is the 11th annual survey conducted by RAB and Borrell Associates. The report analyzes online ad revenue from 3,753 radio stations as well as survey responses from 851 local radio buyers and 169 radio managers.
According to the report, the digital sales spike that the industry saw in 2022 is expected to continue into 2023. Last year, radio stations drove $1.8 billion in digital sales, which is up by 21.1% for the year. The report found that those sales accounted for nearly one in five advertising dollars, with a significant portion of those dollars coming from streamed video advertising.
Digital continues to be the catalyst for growth in today’s environment, said Erica Farber, RAB president and CEO. “A solid foundation in digital is a key driver for today’s successful marketing professional. As technology evolves, revenue and sales gains can only be obtained via digital services and training know-how.”
The report, which was sponsored by Marketron, found that 19% of total ad revenue was derived from digital sales in 2022, a figure that represents somewhere between $85,064 (for the average small-market station) and $1.2 million (for a large-market station). According to the report, some market clusters have brought in tens of millions of dollars from digital ad sales.
“It’s remarkable that the industry has grown digital revenue 80% in the past three years,” said Gordon Borrell, CEO of Borrell Associates. “If it hits $2 billion, as we’re forecasting, I think it marks the start of a new era where radio remains a solid core, but digital products become the industry’s most important growth engine.”
The report highlights several other findings as well:
- In 2022, digital revenue for eight publicly held radio companies averaged 13.3% of total ad revenue — but represented 48.6% of top-line revenue growth.
- Those who buy radio advertising are three times more likely to buy streaming audio and streaming video — and are nearly twice as likely as nonbuyers to purchase email sponsorships and banner advertising.
- A growing number of station managers are speculating that hiring digital-only sales reps is the best way to drive sales.
- Banner ads still account for the largest amount of revenue for most stations but revenue from streaming-video products is developing rapidly.
- 81% of stations were selling streaming video in 2022.
A live webinar featuring a review of the survey results will take place on Feb. 22, 2023.
