Radio Stations’ Digital Ad Revenues Continue to Climb

February 15, 2018

Radio stations’ digital advertising revenues grew by 13.4% last year to hit $700 million, reports the Radio Advertising Bureau (RAB) as part of a study released in conjunction with Borrell Associates Inc. That continues a strong run of digital ad revenue gains for US radio stations in recent years.

This is the 6th annual report on local radio stations’ online revenues, and each year’s edition has documented double-digit gains. Last year’s growth rate of 13.4% was the fastest since 2014, when radio stations’ online ad revenues climbed by 16%.

The report also contains survey results from 1,300 local businesses that buy radio advertising: 85% indicated that they also buy digital advertising in some form, and three-quarters said they buy digital and radio together.

As a result of these trends and continued increases, digital ad revenues accounted for an estimated 7.5% of the average station’s total ad revenues in 2017, up from 6.3% the year prior.

As with TV – and unlike with other traditional media – digital ad revenues still command only a fraction of radio’s overall advertising revenues. A PwC forecast last year expected radio advertising revenues to hit $19.1 billion in 2021, of which $2 billion (~10.5%) would be digital.

For context, PwC predicts that digital will represent about 7.6% of TV ad revenues in 2021, 59.3% of consumer magazine ad revenues, 44.3% of newspaper ad revenues, and 46.4% of out-of-home advertising revenues.

Radio Ads Drive Search Activity

Separately, a recent report [pdf] from the RAB revealed that radio advertising drove an average 29% lift in Google search activity for the 8 advertisers that were studied. Perhaps reflecting radio listening trends, searches as a result of radio advertising were found to be higher on weekdays than weekends, and higher during the midday and morning drive hours.

The study also revealed that the quality of radio creative impacted the extent to which search behavior increased. (A separate study from Nielsen Catalina Solutions likewise found that creative quality has the single biggest impact on sales lift from advertising.)

The RAB study indicated that price deals, and product or feature news were among the creative elements most associated with a lift in search activity.


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