Report: Digital Radio Sales To Grow 22 Percent This Year

Gordon Borrell

With a digital revenue increase of 15% in 2013, radio is poised to grow 22%  this year -- surpassing the half-billion mark in digital advertising for the first time -- according to a new report issued by Borrell Associates on behalf of the Radio Advertising Bureau.

The report, Benchmarking: Local Radio Stations’ Online Revenues, states that the average station made $166,490 in digital advertising, or about 3% 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 is based on Borrell's ongoing industry-wide surveys of more than 7,400 local online operations in the U.S. and Canada, including more than 2,790 radio stations in 751 clusters. This report analyzes data from three principal sources: ad revenue as reported by the stations, local business ad spending, and a radio manager survey asking questions about digital revenue resources, sales methods, expenses and other digital operations.  This year’s manager survey is comprised of 294 respondents representing 2,010 stations.

Along with detailed benchmarking, the report offers insights into what radio managers are thinking with regard to their digital ventures.  The majority of managers (62%) believe their sales reps are talking to the wrong buyers when trying to sell digital and an overwhelming majority (92%) believes that more training would help boost digital sales at their stations.

"There are a lot of positives here," said Gordon Borrell, CEO of Borrell Associates. "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."

Erica Farber

Overall, radio sellers closed $426.3 million in local online advertising last year according to Borrell Associates. They expect the number to hit $520 million this year as many radio groups expand into selling fast-growing digital services.

“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 Erica Farber, President and CEO, RAB.  “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.”