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Broadcast radio increasing focus on digital sales

February 16, 2016 | By Research Team—DCN

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. The Benchmarking: Local Radio Stations’ Online Revenues 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 states that digital advertising will account for 6.5% of station revenue by the end of 2016, a full point above what it was in 2015.

For some, the opportunity goes beyond banner ads and spots in the audio stream. Nearly half of the stations are now selling digital services — mostly Search Engine Optimization (SEO) and website design.

This 4th annual Borrell-RAB benchmarking report documents digital revenue, market share, sources of revenue, methods of billing, and attitudes toward digital ventures. 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.

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