Radio continues to ramp up digital initiatives, with attitudes toward digital strategies improving and industry revenues fast approaching $1 billion, according to research released today by the Radio Advertising Bureau and ad-tracking firm Borrell Associates.
Local radio stations generated $804 million in digital ad revenue in 2018 and are forecast to make $949 million this year, the report says.
The report showed that the average station earned more than a quarter-million in digital revenue in 2018, up 15% from the previous year. Digital revenue will surpass 10% of the average station’s ad revenue this year, according to the research. Some stations are exhibiting remarkable performance. The research shows that top-performing market clusters get three to five times the market share of peer stations.
The findings are a part of the RAB and Borrell’s seventh annual report on how radio’s digital efforts are faring. The report, “Radio’s Digital Sales Inch Closer to $1 Billion,” is being released today to RAB members. It analyzes online ad revenue from 3,121 radio stations, as well as survey responses from 1,715 local radio buyers and a survey of 132 radio managers.
Among the findings:
• 97% of radio advertisers buy digital advertising with traditional forms of advertising in their marketing campaigns, up from 85% a year ago.
• 25% of the average station’s radio customers buy digital advertising from the station.
• Streaming-video advertising is gaining high interest. Among radio buyers, 27% already buy it and 9% more plan to start.
• Attitudes toward digital strategies have improved. Managers who believe their station’s strategy is good has grown from 49% to 72% over five years.
• 57% of stations report that they include digital products with every sales pitch.
• Depending on market size, the average radio cluster gets between 1.0% to 6.6% of the addressable digital market. Best-practice market clusters get four to five times that.
“Digital has been integrated into all facets of broadcast radio’s offering both in programming and sales, and the results are definitely paying off,” stated Erica Farber, President and CEO, RAB. “As radio continues to provide integrated marketing solutions to its advertisers we expect to see continued growth. The RAB is focused on providing digital training and continued knowledge-building for our members so they can better serve their clients.
“Broadcast radio has been focused on digital’s integration into its overall offerings and as this year’s study reveals, we continue to see growth and attributable results,” Farber added. “RAB’s digital training offerings are also evolving to meet the industry’s needs and provide the training necessary for sellers and marketers today.”
“This year’s findings quantify that there’s great upside potential,” said Gordon Borrell, CEO of Borrell Associates. “Nearly all radio buyers are also buying digital advertising, yet only 1 in 4 of a typical station’s customers is buying digital products from the station. Closing that gap represents a big opportunity.”
The full report is available to RAB members on RAB.com: Click here. Live webinars featuring the survey results presented by the RAB and Gordon Borrell are available on February 12 or February 14 for free to RAB members and survey participants.