The radio industry will crack the half-billion-dollar mark in digital advertising in 2015 for the first time, growing revenues 18%, according to new research issued by Borrell Associates on behalf of the Radio Advertising Bureau (RAB).
The report, Benchmarking: Local Radio Stations’ Online Revenues, shows that radio stations added or reassigned as many as 750 new employees to focus on digital ventures last year, causing revenues to grow 16% in 2014 according to Borrell Associates’ projections. More than one-third of the radio managers surveyed indicated that they had at least one employee exclusively assigned to digital operations, up from 11% last year. Also, over 33% of those surveyed said their stations were either: setting up a “digital agency,” planning to set one up soon, or already had one, Borrell reported.
The 3rd annual report is based on Borrell’s ongoing industry-wide survey of more than 10,000 local online operations in the U.S. and Canada, including 2,996 radio stations in over 700 market clusters. Data from three principal sources was analyzed: digital ad revenue as reported by the stations, digital ad spending by local business, and a survey of 211 radio personnel with questions about digital revenue resources, sales methods, expenses and other digital operations.
Along with revenue benchmarking, the report offers insights into what radio managers are thinking with regard to their digital operations. Among the findings:
– Nearly two-thirds believe their sales reps are talking to the wrong buyers when trying to sell digital
– 77% gave sales training a No. 1 or No. 2 priority in terms of what would boost their station digital sales the most
“The radio industry is starting to develop some significant digital assets,” said Gordon Borrell, CEO of Borrell Associates. “The amount of digital staffers added in the past year, plus the continued strong belief by two-thirds of the managers that digital media holds “significant opportunity,” is very encouraging.”
Overall, radio sellers closed $494 million in digital advertising last year, up 16% from 2013 according to the report. For 2015, Borrell expects 18% growth, to $583 million. Radio managers are continuing to see great potential in the digital space and are focused on sales training to unlock it — 96% of them indicate that their sales teams could use more training on selling digital.
“It’s important to look at all available revenue data in order to provide our industry members with additional market barometers,” said Erica Farber, President and CEO, RAB. “We’re making tremendous strides in Radio’s digital growth; and this survey continues to provide us with areas to focus on and invest in to truly maximize this revenue stream.”
Farber also noted, “Its evident sales managers are looking for ongoing training for their sales staffs and a better understanding of the digital advertising marketplace. The RAB is poised to help in this area through our professional development programs and business development efforts.”