Online revenues for radio will grow 14% a year over the next five years, according to a report from BIA Kelsey. Overall, radio revenues will rise just 3.7% in 2011 and 4.5% in 2012, meaning that online or digital revenue’s share of total revenue to radio will increase.
“Radio… continues to face a lot of competition in the local and online advertising marketplace. Stations are responding by becoming more aggressive with their digital and online strategies, which are driving measurable revenue.” says Mark Fratrik, vice president, BIA/Kelsey.
According to recent 2010 data from RAB, digital revenue for radio is up 24% over 2009 to 3.5% of overall revenue, up from 3% of overall revenue in 2009.
BIA Kelsey’s reported increase in the portion of radio’s revenue that came as digital dollars last year was 14.1%, versus RAB’s report, using Miller, Kaplan data, that digital dollars for radio were up 24%. This could be due to different assignments of revenue to the “digital” category.
Last week Cox Media made a couple of smart moves that signify their serious approach to online advertising. First they announced that they would merge Adify, a company they acquired a couple of years ago that sells online advertising across vertical networks, with Cox Cross Media to form a new division Cox Digital Solutions. Within days they added to this move, buying the IB Local Network business and advertising sales group of Internet Broadcasting. Internet Broadcasting is an online banner network company that has been around awhile. No doubt, they have well established relationships and know how to sell online ad campaigns.
With the acquisition, Cox Digital picks up the products, customers and employees, all invaluable assets to a broadcast company looking for a digital makeover. The new company will be headed by Steve Shaw, formerly a Sr. V.P. with Cox Cross Media. Shaw himself is a retooled Radio Rep executive who left Katz Radio in 2006.
“IB Local Network’s publisher relationships and media sales power are a natural fit with Cox Digital Solutions.” said Steve Shaw, President of Cox Digital Solutions. “This combination will enable us to meet a wider set of customer needs through a richer solution set, increase efficiencies, and significantly expand our opportunities for growth.”
Broadcasters have struggled to capture digital dollars from the ever increasing digital portion of advertising revenues. This move, like the earlier acquisition of Adify, is a smart approach to doing business with digital agencies by meeting them on their own terms.