RAB

In sharp contrast to sluggish spot revenues, radio stations grew their digital dollars by 13.4% to $700 million in 2017, according to new figures from the Radio Advertising Bureau and ad-tracking firm Borrell Associates. Offering more evidence of the heightened importance it plays in radio's revenue mix, digital now accounts for 7.5% of the average station’s ad billings, up from 6.3% last year.

The new numbers come from the 6th annual RAB-Borrell Benchmarking Local Radio Stations Online Revenues report, which analyzed online ad billings from about 1,000 radio stations, as well as survey responses from more than 1,300 local businesses that buy radio advertising.

“Digital has been integrated into all facets of broadcast radio’s offering both in programming and sales, and the results are definitely paying off,” RAB president and CEO Erica Farber said in a news release. “As radio continues to provide integrated marketing solutions to its advertisers we expect to see continued growth.”

The average market cluster generated $1.1 million in digital billings last year, while the average station pulled in $237,468. The Borrell-RAB forecast calls for radio’s digital revenues to approach $800 million in 2018, a 14% increase over 2017.

“Radio is definitely embracing digital as an opportunity to serve customers better, more so than in previous years,” said Borrell Associates CEO Gordon Borrell. “Stations are clearly offering a level of marketing expertise to their customers that makes the digital buy ‘safe’ and certainly stronger when combined with radio spots.”

To complement and help drive their over-the-air ad packages, broadcasters have been ramping up their digital offerings, moving beyond just selling banner ads and audio streaming spots. The number of stations selling digital services – such as SEO, website development, and social media management – has doubled during the past two years.

The trend is in response to increasing client demand as local radio advertisers are “especially enamored” with digital marketing, per the report. It shows that 85% of radio advertisers are also buying some form of digital advertising, and that three-quarters of them are buying digital and radio together. And seven in ten radio advertisers say they are planning to increase spending in digital. Radio advertisers’ top marketing goal is to acquire new business, and they rank social media and radio as the Top 2 methods to achieve those goals.

The report includes data from a survey of 126 radio managers representing more than 1,000 stations. Conducted from December 2017 to January 2018, the radio mangers survey asked about digital revenue sources, strategy, sales methods and other issues related to digital operations. Of the respondents, 10% were owners, 28% were GMs, 43% were sales managers, 4% were sales reps, 4% were directors of digital operations and 11% held other titles. The report also incorporates data from a Borrell survey of 1,351 local radio advertisers, culled from a larger survey of 3,511 local businesses, using a crosstab of those who said they currently buy radio. This survey was conducted from April-July 2017. Ad revenue from 3,085 local radio stations in Borrell’s database is also factored into the results.

The full report is available to RAB members on the RAB website. Live webinars on Feb. 13 and Feb. 15 featuring the survey results are available free to RAB members and survey participants.