Local Radio Stations Capitalize on Digital Ad Revenue Growth

February 26, 2019

This article is included in these additional categories:

Advertising Trends | Cross-Media & Traditional | Digital | Radio | Spending & Spenders

It’s not just TV where ad spend is becoming increasingly digital. With smartphones, smart speakers and other devices all able to tune into the airwaves, digital ad revenue on radio continues to see double-digit annual growth rates. And it’s not just large networks – local radio stations saw digital ad spend grow by 15% in 2018, according to research [press release] by the Radio Advertising Bureau (RAB) in conjunction with ad tracking firm Borrell Associates.

Last year’s revenue growth ties 2013 for the third-highest growth in the seven years the report has been published. The fastest growth was seen in 2012, with a 22% revenue uptick, followed by 16% in 2014.

The good news for digital advertisers is that the trend towards increasing revenue in radio is expected to continue into this year. Revenue for 2017 hit $700 million and increased by $104 million in 2018. If forecasts are accurate, revenue will increase another $145 million in 2019 to reach $949 million.

The study, consisting of data from online ad revenue from 3,121 radio stations and surveys of 1,715 radio buyers and 132 radio station managers, also reported that 97% of radio advertisers buy digital advertising with traditional forms of advertising in their marketing campaigns, up 12 percentage points from 2017.

Here are some other findings from the new report:

  • One-quarter of the average station’s radio customers buy digital advertising from the station.
  • More than one-half (57%) of radio stations include digital products with every sales pitch.
  • Seven in 10 (72%) station managers believe their digital strategies are good. This is up from five years ago when fewer than half (49%) felt this way.
  • The average radio cluster gets between 1.0% to 6.6% (depending on the market size) of the addressable digital market, with best-practice market clusters getting four to five times that amount.

About the Data: Finding for the report are comprised of analysis of US online ad revenue from 3,121 radio stations, as well as survey responses from 1,715 local radio buyers and a survey of 132 radio managers.

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