Digital Revenue Is The Bright Spot On Radio’s Revenue Report Card For 2011

Broadcast radio’s revenues from digital assets continued to outpace other categories in the 4th quarter of last year, according to a report by the Radio Advertising Bureau. Spot revenues meanwhile, shrank another 1% from a year before – a reality that is more ominious considering that the economy began to show signs of life late last year and many sectors were seeing recovery from the very low numbers of 2010.

Digital revenue in this report is activity generated by websites, Internet/web streaming and HD Radio. It grew by 15% over the previous year. “Driven by Radio’s mobility, local appeal and scale, broadcasters are finding more and more ways to generate the interactive experience expected in today’s marketplace.” said Jeff Haley, RAB President and CEO.

Digital revenues account for a mere 4% of the overall revenue for broadcast radio. While that number is growing, it’s not growing fast enough to replace ad dollars lost in the form of declining spot revenues. Digital media sources are replacing traditional ones as devices such as tablets and smartphones accelerate the migration online. In 2010, digital news readership and revenues were higher than newspaper readership and revenues for the first time.

The fact is, radio is well positioned to grow online audio ad dollars, thanks to a well developed business model. Pandora and sales companies like Targetspot, Katz360 and Triton’s Digital Sales group, radio’s national advertisers understand online radio and know how to buy it. Expanding the number of advertisers by improving online offerings and emphasizing online sales assets among local sellers is the key to growing digital revenue. In fact, according to Inside Radio, Clear Channel revenues grew 4% last year – attributable to the purchase of Westwood One’s traffic division as well as “higher digital radio billings.”

 

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