Radio’s digital revenue grew 6.8% in 2023, reaching $1.9 billion and stealing market share from other local media competitors, according to the annual digital revenue benchmarking report released in February by the Radio Advertising Bureau and Borrell Associates. “We're absolutely doing better and it is predominantly about digital audio,” John Rosso, President and CEO, Triton Digital, said Tuesday at NAB Show 2024 In Las Vegas.
“We're doing way better, on average, in driving rates, particularly in streaming and podcasting,” Rosso said during a panel discussion about selling digital advertising. “And it's podcasting that is leading the way, and then streaming gets packaged in by a lot of sellers.”
As a result, simple supply and demand economics are driving digital audio CPMs up. “We've seen national streaming campaign rates in our programmatic marketplace over the last few years more than double,” Rosso said, shooting up from an average $3 CPM to $6 CPM today. “There's a little bit of scarcity happening because we don't have as much supply in that marketplace as we'd like,” Rosso noted. Interest in audio among marketers is up, he added, due in large part to podcasting’s growing mindshare. “They might come in through that door but then they buy other things, including broadcast. We're seeing a new level of interest in digital audio.”
New numbers from the Interactive Advertising Bureau back that up. Internet ad revenues reached a record level in 2023, and no segment of the market grew faster than digital audio for the second consecutive year. The IAB says digital audio – which includes podcasts, streaming radio, and online music services – had 18.9% year-over-year growth in 2023 as it continued to outperform other formats, with $7 billion in total revenue. That compares to $5.9 billion of revenue a year earlier, and more than double the $3.1 billion recorded in 2020.
Jamie Cohen, Senior VP, Broadcast Digital at Salem Media Group, said they are also seeing an increased uptake for their digital offerings, especially on the local level. “Our teams are getting smarter; we're working better with our partners,” Cohen said. This correlates with a shift in focus at the Christian- and conservative-centric media company from selling products to delivering outcomes. “It's a better conversation, it's a better path, it's a better client relationship,” he told attendees during the session, “How to Effectively Sell Digital Advertising Solutions.” “We're doing better because I think we're shifting the story to understanding what a business owner wants and needs.”
Also contributing to Salem’s digital growth is a more diverse menu of ways to reach audiences on different platforms, including linear, over the top, audio, and TV. “We're getting better because we're embracing what we are and what we have. We're proud of it instead of running from it.”
Rosso said one of radio’s biggest challenges is developing the ability to show real-time attribution. For younger ad buyers accustomed to investing in digital advertising, that’s essential. It’s incumbent on radio broadcasters to demonstrate that ability in near real-time, Rosso asserted.
“It's not wait for the end of the campaign to see if that hardware store’s sales went up over that period of time,” he said. “It’s like, what did you convert today? Because tomorrow morning, they're going to re-optimize the campaign. As radio broadcasters who are selling digital, we’ve got to figure out how do we tap into that?”
There is currently no consensus in the radio industry on whether to employ digital-only sellers or have the entire sales team offer every product in the broadcaster’s arsenal. “It's a real mixed practice out there,” Rosso said. “There's a model that we've seen centered on sellers selling everything. But there's usually some separate tier of digital managers.”
Salem has AEs that sell all its products, along with a group of media strategists that help sellers “cross that bridge to where they're not selling their platform, they’re selling their audience,” Cohen explained. “And we sell both their ears and their eyes.”
The session was moderated by Dave Casper, Senior VP, Digital Services, RAB.