Faced with the recession and falling revenues, the radio industry has begun to sell online assets with some success. According to the Radio Advertising Bureau, in the first three quarters of this year the radio industry has grown off-air revenues, which mainly include online and promotional dollars, at a rate of 9%. During the same period, local and national revenues dropped at the same rate of 9% (against a much larger number). You can read more in business publication Seeking Alpha.
This trend is good news none to soon given that radio revenue projections for 2009 are bleak. According to Mark Fratrik, VP, BIA Industry Services, “the industry will weather the storm providing it strategically invests in its online presence, which will prove to be its rescue as ad budgets continue to shift to more measurable online media.”
The words “measurable online media” are key to the future development of online sales for the radio industry. The advertising industry is shifting dollars toward measured results and away from generic “branding” – and the ongoing recession is accelerating that trend.
Online Recession will be mild
This week eMarketer pulled back on an earlier projection of 14.5% for interactive revenue growth to a more modest 8.9% for 2009. According to an article in The Economist, the recession for online advertising will be a mild one due to the fact that online advertising blends branding with “below the line” advertising because it can be measured and tracked to consumer purchases. The article cites an example from Randall Rothenberg of the IAB (Interactive Advertising Bureau) of a “rich-media ad for Kraft, … in which a yummy image raises brand awareness, a click reveals a recipe that increases consideration, another click provides coupons and yet another click initiates a game that can be shared with friends.”
There’s an enormous opportunity for radio to develop creative cross platform opportunities that can drive traffic and provide measureable results for advertisers. The win is that once you provide those measurable results, you become a far more essential, recession-proof element of the ad budget.