Brighter Outlook for Radio Advertising

Radio station operators have encountered the same threat as other traditional media companies when it comes to their income streams – a shift by advertisers to trendier online media properties.  In response, some radio station companies are moving to the online format which presents a growing opportunity.  1150867_digital_radioResearch concern SNL Kagan predicts that online radio revenues, which should reach $441.4 million or 2.7% of the industry total this year, should grow to $827 million by 2013.  At that point, online revenues would comprise close to 5% of the industry total. To improve their prospects in this sector, radio stations will be dressing up their Web sites, and according to SNL Kagan analyst Justin Nielson, they’ll be “embracing online streaming and mobile apps to drive their local base to their multiple platforms.”

Industry watchers disagree about the projected level of overall radio revenue. The industry is expected to bring in about $14.8 billion in 2009, down significantly from 2008. Part of radio’s future is linked to consumer behavior and lately, there has been some good news on that front. An ARAnet study carried out by Opinion Research Council finds that consumers obtain a significant percentage of their news and information from radio. In 2009,  consumers said 19.4% of their media consumption related to radio, an increase of nearly 3% from 2008. U.S. consumers say they find TV to be the most credible information source. However, radio ties with newspaper for second place with each media form claiming 6.3% of the total share.

Marketers who want to broaden the reach of their messages  may continue to find that radio represents a unique and effective way to deliver consumer attention.

[Sources: Media Usage Study, ORC and ARAnet,  Fall 2009; Online Radio Revenue to Jump 12% in 2009] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.