Radio’s Digital Business is Booming
Local businesses are spending more money than ever on digital media and radio stations are winning out. Yes, you read that correctly. In recent years, radio stations have been touting digital as the perfect compliment to local radio ads and those efforts are paying off.
For the first time, in 2019, radio digital ad sales crossed the $1 billion mark, representing 10% of total radio industry ad revenue, according to a new report by the RAB and Borrell Associates. This year, local radio is expected to garner $1.3 billion in digital ad billings, equating to 13% of total ad revenue.
As digital business booms, it relieves some sting from declining over-the-air ad sales. Last year, local radio sales decreased $248 million compared to 2018 levels, while digital sales generated an additional $198 million from compared to the previous year, the report said. In 2019, digital ad revenue increased an impressive 25% last year and is forecasted to rise another 29% this year, the report noted. According to the survey, the average radio station took in $299,213 in digital revenue in 2019, while the average cluster earned $1.3 million.
When it comes to digital sales, radio’s established relationships with local marketers gives stations a distinct advantage. In a cluttered media environment, advertisers are looking for innovative options. This year, nearly half of all radio advertisers said they are interested in investing in new marketing and two-thirds of those said they’re inclined to buy digital advertising.
Radio is outpacing other local media, including newspapers and TV stations in digital growth and the overall digital ad industry, which was up 9% last year.
As an industry, radio is getting better at providing digital ad solutions, but there’s still work to be done. Seventy percent of radio stations now sell digital, up from 62% last year. When they don’t pitch digital, they’re leaving money on the table: The study reported that one-quarter of radio advertisers considered cutting their on-air ad spending if they weren’t offered digital ads.
Another area that radio stations can improve on is podcast ad sales. Marketers are clamoring to sponsor podcasts, and while three-quarters of local stations are producing podcasts, only half are selling ad time in their shows, the report said.
To capture these digital dollars, radio stations need to continue to aggressively market their on-air, online and social advertising opportunities. Radio companies, including Federated Media, have invested heavily in digital platforms, as well as digital marketing services. As a result, digitally-savvy radio stations can offer local businesses digital ad opportunities on their owned platforms, such as podcasts, websites and mobile, as well as third-party options, including search engine optimization, ad retargeting, search and display ads.
To navigate the fast-moving digital advertising industry, Federated Digital Solutions provides clients with digital marketing solutions and support, and we’re continually adding new products. For both local media and business, digital is the future and the powerful combination of radio and digital can hit all the notes.