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Study: Radio’s Digital Ad Revenue Up 11.4% - Radio World

Study: Radio’s Digital Ad Revenue Up 11.4%

Now at $550.8 million — and counting
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The radio industry appears to be doubling down on digital.

According to a new report conducted and released by Borrell Associates on behalf of the Radio Advertising Bureau, ad revenue for the sector reached $550.8 million in 2015, growing 11.4% last year. Digital advertising is projected to grow to 6.5% of station revenue by the end of 2016.

“Digital continues to be radio’s fastest growing sector,” said RAB President and CEO Erica Farber. “Stations that are laser-focused on increasing revenue beyond their core broadcast business are experiencing the benefits.”

The average market cluster made $951,756 in digital sales last year, with the average station making $231,210.

Stations also indicate belief that their sales representatives are making headway in who they’re pitching in the digital sphere; one-third of those surveyed say reps are talking to the wrong buyers when trying to sell digital products, but three years ago, two-thirds thought that was true.

However, those surveyed still seem conflicted about where sales reps priorities should lie: 16% believe that radio sales suffer because reps are forced to sell digital advertising, but 24% also believe that digital sales suffer because of the focus on radio advertising.

The average radio cluster also received 0.26% of all locally-spent Internet advertising, but there were some that received up to nearly 4%.

“All signs point to the radio industry mobilizing even more in the interactive space,” said Borrell Associates CEO Gordon Borrell. “Eighty-two percent believe there is strong potential — the highest we’ve ever seen; 62% believe that their sales teams’ ability to sell digital products is solid — up from 52% a year ago; and 37% believe their digital strategy is headed in the right direction — up from 27%.”

The full “Local Radio Stations’ Online Revenues” report is available to RAB members on RAB.com. A live webinar featuring the survey results presented by the RAB and Gordon Borrell is available for free to RAB members and survey participants.

In order to compile this fourth annual report, Borrell studied digital revenue for 2,704 stations, and 250 managers were surveyed on their attitudes toward digital ventures.

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