As radio fights for its revenue share in the face of growing competition from an ever-expanding list of digital content platforms, a new study from the Radio Advertising Bureau, Borrell Associates, and Marketron has found that the industry’s efforts are paying off.
The RAB’s 12th annual digital benchmarking report found radio’s digital revenue saw a sizeable increase of 6.8% last year, reaching $1.9 billion. The industry’s Compound Annual Growth Rate stands at a healthy 6.4% since 2020, factoring in both digital and core radio revenues.
By comparison, 2022’s report showed radio stations generated $1.8 billion in digital sales, which was up 21.1% over 2021.
The results further revealed that digital sales constituted 21% of the total ad revenue in 2023, with earnings ranging from $82,835 in small markets to $1.2 million in larger markets. What’s more, is that local radio stole “obtainable digital revenue” in 2023 from outside media competitors.
With continued aggressive growth in the forecast, the $2 billion threshold is expected to be broken in 2024 with one out of every five dollars in radio coming from digital. 70% of radio ad buyers indicated plans to explore new purchases, primarily digital offerings, and more than half of these buyers have yet to engage in digital advertising with their radio stations.
The RAB and Borrell Associates will hold a webinar to discuss the full findings on February 21. Registration is open to RAB members.
RAB President and CEO Erica Farber emphasized, “While broadcast continues to be the core of radio’s revenue, greater interest in digital by advertisers creates an opportunity for radio to super serve its local clients. Comprehensive understanding of digital services and acumen can create both professional and revenue opportunities for radio marketing professionals.”
Borrell Associates CEO Gordon Borrell commented, “What’s most impressive is that radio came out fighting for digital dollars when the pandemic hit and hasn’t let up for a second. The fact that they’ve stolen market share from competing media for the past four years is remarkable. They’re not quite owning the digital space yet, but they are well on their way.”
Marketron SVP of Sales Todd Kalman acknowledged, “The annual benchmarking report is one of the most important for the radio industry. This year’s results offer visibility into what’s helping digital ad sales grow for stations and what local ad buyers think. It provides a look back at the progress made and where we’re headed, with many opportunities for radio companies to increase revenue with digital and linear campaigns. We’re excited about the future and helping the industry evolve to put these insights to use to win new customers and expand share of wallet with current ones.”
Lemme see if my math is correct. 21% in digital, which means 79% still comes from broadcast sales? Are expense budgets created based on this or are audio companies still hell-bent on trimming broadcast budgets will searching for increased digital sales? It’s more than “audio” these days, isn’t it? Broadcast, digital and a combination of both should be well-planned to serve the advertiser and the end (listener) user.
Good News!