Coming off the heels of another strong year for digital ad sales, the radio industry is poised to hit $2 billion in digital sales this year.
That’s according to the Radio Advertising Bureau’s 11th annual benchmarking report, conducted in partnership with Borrell Associates.
In 2022, radio stations drove $1.8 billion in digital sales, up 21.1% for the year. Those sales accounted for nearly one in five advertising dollars, with a fast-growing portion of it coming from the sale of streaming video advertising. That has led to a “tipping point,” the report concludes, with half of the industry’s top-line growth expected to come from digital sales in 2023 and more local ad revenue coming from video streaming than audio streaming spots.
“Digital continues to be the catalyst for growth in today’s environment. A solid foundation in digital is a key driver for today’s successful marketing professional,” said RAB President/CEO Erica Farber. “As technology evolves, revenue and sales gains can only be obtained via digital services and training know-how. RAB continues to provide the training, tools and services needed to realize these gains.”
Borrell Associates CEO Gordon Borrell added, “It’s remarkable that the industry has grown digital revenue 80% in the past three years. If it hits $2 billion, as we’re forecasting, I think it marks the start of a new era where radio remains a solid core, but digital products become the industry’s most important growth engine.”
The annual report, sponsored by Marketron, showed that digital sales in 2022 comprised 19% of total ad revenue, representing between $85,064 for the average small-market station and $1.2 million for a station in a large market. Some market clusters were making tens of millions of dollars from digital ad sales.
“Our most successful clients have made a strong commitment to digital, which includes investing in people and technology,” said Bo Bandy, a Marketron Digital GM and SVP of Marketing. “Successful salespeople are engaging with us on training and are including digital tactics in every proposal. Increasingly, they are looking for digital-first and digital-only opportunities to gain share of wallet from advertisers not currently present on the airwaves. This investment is delivering tremendous returns.”
The findings are a part of RAB’s and Borrell’s 11th annual report, “2022 Digital Sales Approach $2 Billion, Driving Half of Radio’s Growth.” It analyzes online ad revenue from 3,753 radio stations, as well as survey responses from 851 local radio buyers and 169 radio managers.
Additional findings include:
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In 2022, digital revenue for eight publicly held radio companies averaged 13.3% of total ad revenue but represented 48.6% of top-line revenue growth.
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Those who buy radio advertising are three times more likely to buy streaming audio and streaming video and nearly twice as likely as nonbuyers to purchase email sponsorships and banner advertising.
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There is a great deal of upside potential. The average station currently sells digital products to less than one-third of its radio customers.
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While station managers still clamor for more digital training, more of them now believe for the first time since 2019 that hiring digital-only sales reps is the best way to drive sales.
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Banner ads still account for the largest amount of revenue for most stations, but revenue from streaming-video products is developing rapidly. Eighty-one percent of stations were selling streaming video in 2022.
