Study: Digital Revenue Surging In Small Markets

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The total is still a relatively small number when compared to radio’s $14.7 billion in annual ad revenue, however, the good news is digital revenue for radio is still growing, big-time. And it appears small-market broadcasters are really starting to kick it into gear.

A new joint research report from the Radio Advertising Bureau and Borrell & Associates found that digital revenue for radio will increase 22% this year to a record $753 million. The report states that small-market stations are seeing the highest growth rates. Small markets saw growth rates for digital sales between 36% and 83%.

According to the new report, in 2015 the average radio station generated between $49,159 and $602,783 in digital advertising sales, depending on market size. It also showed that among the more than 800 clusters, the average market cluster surveyed broke the million-dollar mark in digital sales for the first time, reaching $1.1 million, and 2.5% of market clusters made more than $5 million in digital sales. Overall, digital ad sales growth averaged 12% for radio stations.

digital-ad-chart

Gordon Borrell
Gordon Borrell

Borrell Associates CEO Gordon Borrell said, “We’re seeing a lot more optimism from radio managers this year. Twice as many told us they’re planning for growth of 20% to 50% in 2017, so there’s obviously something in the air.”

This is the fifth year that Borrell has produced the report for the RAB. The report utilizes Borrell’s database that tracks digital revenue for 10,597 local online operations in the U.S. and Canada, including 3,210 radio stations. It also provides insights from a recent survey Borrell conducted of 2,667 radio advertisers, as well as a 14-question survey of 194 U.S. radio station managers.

4 COMMENTS

  1. “Gordie” here, addressing the three neanderthals. First, we are an independent research company that doesn’t have a contract with RAB; this is a voluntary report that we do to help the radio industry shed some light on what the industry is doing in digital sales. Perhaps you also blame your local meteorologist when the weather isn’t doing what you think it should? Second, I sincerely hope none of you is in a leadership position in the radio industry, because what the industry needs is forward-thinking people who embrace the future and find new ways to serve listeners and advertisers instead of refusing to change when the world is doing so, rapidly. The fact is, the stations who are embracing digital FULLY are seeing radio sales outpace the industry. Why? Because they’re creating a more exciting product by combining digital with radio advertising. Hell, I bet if you guys were around 60 years ago, you’d be bleating that the radio industry was losing huge amounts of audience and market share because its broadcast leaders had abandoned evening serials and were too distracted by that worthless medium called television.

  2. I’m noticing NPR showing up in the Nielsens stronger and stronger in some markets. This, while radio is preoccupied with web sites and streaming.

    NPR, for God’s sake.

  3. Has radio given up on its own services and products?
    Based on the quality of programming and ad creation – at the local level – one can only assume the affirmative.
    Any bleatings to the contrary are unimpressive, easily challenged and unproductive.

  4. The effort and time put forth to produce the small digital dollars could have produced ten times as much in regular air-time radio ads.
    If this had been done, radio would be enjoying big gains in ad revenues instead of “flat is the new normal.”
    Gordie Borrell can cheer all he wants. He’s a consultant with an RAB contract. Total radio sales are flat, Gordie. That’s what matters.

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