Report: Radio Digital Sales Set to Grow 22 Percent
February 26, 2014
A new report issued by Borrell Associates on behalf of the Radio Advertising Bureau (RAB) shows that radio's digital revenue is poised to grow 22 percent this year, surpassing the half-billion mark in digital advertising for the first time. The report, titled Benchmarking: Local Radio Stations' Online Revenues, states that the average station made $166,490 in digital advertising in 2013, or about 3 percent of its total revenue. Some large-market stations are making millions, Borrell reported. Average revenue for four-station clusters is approaching three-quarters of a million dollars.
The report also offers insights into what radio managers are thinking with regard to their digital ventures. The majority of managers (62 percent) believe their sales reps are talking to the wrong buyers when trying to sell digital, and an overwhelming majority (92 percent) believe that more training would help boost digital sales at their stations.
"There are a lot of positives here," commented Borrell Associates CEO Gordon Borrell. "We're still seeing three-fourths of the managers say they believe digital sales hold a lot of growth potential, and now we're seeing some clear suggestions on how to tap it. Training is an opportunity, as is the need to get more buy-in from upper management. Apparently, the rank-and-file are trying to get the word back to the general that there's gold in them thar' hills."
Overall, radio sellers closed $426.3 million in local online advertising last year, according to the report. That number could hit $520 million this year as many radio groups expand into selling fast-growing digital services. Those services include app development, Search Engine Optimization (SEO) and social media and e-mail management. Based on the report, one-third of station groups already have expanded into those offerings.
"We're experiencing year-over-year double digit growth in Radio; and to truly maximize this revenue stream this survey continues to provide us with areas to improve upon and ultimately grow our overall revenue share," said RAB President and CEO Erica Farber. "Most notably, sales managers are looking for continued training for their sales staffs and a better understanding of the digital buying community. The RAB is poised to help in this area through our professional development programs and outreach."