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Study Shows Broadcast Radio Increasing Focus on Digital Sales, Poised to Grow Revenue 14% in 2016

New York - February 8, 2016 - The radio industry grew its digital ad revenue 11.4% last year, to $550.8 million, and is poised to grow even faster this year, according to a comprehensive study conducted by Borrell Associates on behalf of the Radio Advertising Bureau.

Benchmarking: Local Radio Stations’ Online Revenues, the 4th annual benchmarking report, showed that the average market cluster made $951,756 in digital sales last year, with the average station making $231,210. With forecast growth of 14%, the report said, digital advertising will account for 6.5% of station revenue by the end of 2016, a full point above what it was in 2015.

 “All signs point to the radio industry mobilizing even more in the interactive space,” said Gordon Borrell, CEO of Borrell Associates.  “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%.”

“Digital continues to be radio’s fastest growing sector.  Stations that are laser focused on increasing revenue beyond their core broadcast business are experiencing the benefits,” stated Erica Farber, President and CEO, RAB.  “The results from this study provide us with insights of where efforts are paying off and what additional training is needed for radio to continue with this trajectory,” added Farber. “The RAB is here to help with that knowledge and training.”

The research studied digital revenue for 2,704 stations and surveyed 250 managers on their attitudes toward digital ventures. It documents digital revenues, market share, sources of revenue, methods of billing, and opinions on station strategies.  Among some of the findings:

•    One-third of stations surveyed believe their sales reps are talking to the wrong buyers when trying to sell digital products. Three years ago, two-thirds believed that was the case.
•    Only 16% believe that radio sales suffer because reps are forced to sell digital advertising. That’s down significantly since 2014, when more than half felt that way.
•    Conversely, 24% believe that digital sales suffer because reps focus on radio advertising. Three years ago, twice as many felt that way.
•    The average radio cluster received 0.26% of all locally spent Internet advertising.  There were some, however, achieving 15 times that - up to nearly 4%.

The full report is available to RAB members on RAB.com: Click here.  A live webinar featuring the survey results presented by the RAB and Gordon Borrell is available for free to RAB members and survey participants. 

Press Inquiries: To receive an executive study, please send an email to press@rab.com.

About the Radio Advertising Bureau
The Radio Advertising Bureau is the not-for-profit trade association representing America's broadcast radio industry. Its primary objective is to drive revenue growth through advocacy, providing the tools and resources to help the industry attract new sales talent to the medium and enhance industry professionalism through training and support. The RAB serves more than 6,000 member stations in the U.S. and more than 1,000 member networks, representative firms, broadcast vendors, and international organizations. Learn more at www.rab.com.

About Borrell Associates
Borrell Associates is a research firm that tracks and analyzes trends in local advertising. Hundreds of media properties subscribe to its Compass product, seen at www.adspending.com, which offers comprehensive data on advertising and marketing expenditures for any U.S. or Canadian market.  The firm publishes regular reports on trends in local advertising and each spring in New York City convenes #LOAC, largest gathering of local digital media executives. The company was established in 2001 and is based in Williamsburg, Va.  More information can be found at www.borrellassociates.com or by calling 1-757-221-6641.

Contact info:
Press@rab.com