Local Radio to Become Competitive Force in Online Ad Sales

Radio stations are in the midst of transforming how they generate revenue as digital technology continues to carradio2improve.  While some of the ad revenue is national, local radio stations are also competing hard with TV and newspaper sites to sell new forms of digital to local advertisers.

Borrell Associates has just released its Benchmarking Local Radio Stations’ Online Revenues report. In 2012, local radio stations sold $370.7 million in digital advertising which marked a 22% increase over the previous year. As a result, digital radio accounts for 2% of all digital advertising sold. Here’s how the spending by marketers breaks out by digital format for those who bought local advertising from radio operators:

  • Paid Search $14.7 million
  • Display run-​of-​site $155.6 million
  • Display targeted $26.6 million
  • Streaming video $33.9 million
  • Email $63.9 million
  • Streaming Audio $76 million

By the end of this year, radio’s piece of the local digital ad sales pie will drop to 1.7% of the total $24.5 billion projected total. Revenue for local radio will increase to $422.6 million.

Gordon Borrell, CEO of Borrell Associates, notes that while radio stations have been in a ‘come-​from behind position,’ they are now generating strong competition on the digital front for newspaper and TV companies.

[Sources: Slight Gain in Share for Local Digital Radio Ad Spend. Emarketer. 19 Mar. 2013. Web. 20 Mar. 2013; New Report Says Radio Turning Corner. Radio Sales Today. Rab​.com. 19 Mar. 2013. Web. 20 Mar. 2013]

 

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.