Friday, May 4, 2012 | Edited by Daniel Moores
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Benchmarking: Local Radio Stations' Online Revenues

There is a new analysis from Arbitron/Borrell focusing on online revenues generated by local radio stations. This is the first year that the two companies have cooperated on a special radio report, although Borrell has been surveying local online spending for a decade.

According to this survey, radio's online ad revenue has grown from $18M in 2002 to $303.7M in 2011. This represents 2.4% of radio's gross revenue in 2011, says Borrell. By comparison, local online represents 25% of directory (Yellow Pages) revenue, 16% of newspaper and 15% of TV according to Borrell.

The report forecasts 35% growth for local radio's online revenue in 2012, to $409.9M. Radio's share of 2011 local online was 1.8%. Pureplay Internet companies captured just under half of total spend (46.2%) followed by newspapers (24.7%), directories (12.6%), broadcast TV (12.0%), cable/satellite (1.0%), magazines (0.8%), and other print (0.9%).

Radio's 2011 streaming audio revenue was up 20% over the 2010 level and is forecast to double in 2012 as more stations see value in their streaming audio audiences. Even doubled, that total will be half that of radio's pureplay competitors (Pandora and numerous other independent stations who are beginning to grow local ad sales).

Borrell says the pureplay Internet companies are actually losing share due to evolving relationships between the pureplays (who own superior technology) and legacy media companies who offer promotion, salespeople on the street, and content.

Other highlights from the study:

RADIO GETS 62% OF ITS $303.7M ONLINE REVENUE FROM BANNERS, STREAMING AUDIO ADS:
  • Untargeted Banners - $121.9M (40.1%)
  • Targeted Banners - $7.5M ( 2.5%)
  • Paid Search - $39.5M (13.0%)
  • E-mail - $37.4M (12.3%)
  • Streaming Video - $30M ( 9.9%)
  • Streaming Audio - $67.4M (22.2%)
RADIO MANAGERS SPLIT ON WHETHER STREAMING-AUDIO PRODUCT IS FAIRLY PRICED:
  • 50% of radio GMs, GSMs surveyed by Borrell think streamed-audio is underpriced
  • 49% think product is priced fairly
  • 1% think it is overpriced
RADIO'S DIGITAL SALES FORCE:
  • Borrell estimates there are approximately 17,000 radio sales reps on the street
  • It's estimated that there are approximately 4,200 radio reps selling digital products
  • Only 11% of radio companies had digital-only sellers at the beginning of 2012


(Source: Andy Rainey, SVP/Research, RAB)





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