As radio revenue derived from selling digital products grew steadily during the past six years, so too did the confidence managers have in their stations’ digital strategy. Nearly nine in ten radio managers (86%) surveyed by Borelll Associates for the Radio Advertising Bureau rated their digital strategy as “fair to brilliant” in 2021, up from 51% in 2015. Manager confidence in their sales team’s ability to sell digital advertising is also on the rise with 43% rating it as good in 2021, up from 31% in 2020, while 37% described it as fair, down from 48% in 2020.
And since 2019, the portion of managers with “poor” confidence tumbled from 23% to just 14%.
The segment of managers surveyed by Borrell that say they try to include an online/digital ad component in every sales pitch rose to nearly two thirds (62%) in 2021, up from 57% in 2020 and 51% in 2018. With radio advertisers routinely buying digital advertising – 96% of local radio advertisers spend an average of $32,464 on social media – broadcasters that don’t include digital in their pitch are missing a major opportunity. “Digital is a really important thing to keep the conversation going with them,” Borrell Associates CEO Gordon Borrell said during a webinar for RAB members Wednesday afternoon. “You certainly want to lure them back into radio or keep them from leaving radio and digital provides the stickiness to that.”
Thanks to more investment and training, stations are having greater success in selling digital products to their existing customer base.In 2021, 42% of radio managers said 20% to 59% of their current customers bought digital products from them, up from 28% in 2020.
But there’s still a long way to go. On average, 70% of a station’s customers are not buying digital products from the station. “They’re buying digital, they’re just not buying it from you,” Borrell chided the webinar crowd. “That’s an issue and something you really do need to track.” On the other hand, 65% of the average surveyed station’s digital customers are only buying digital products from the station. “That’s a good statistic because it indicates you’re growing your customer base,” Borrell said, noting that digital has increased radio’s local customer base by 17%-20%. And with that comes the opportunity to persuade digital-only clients into adding a radio schedule to their campaign.
Homing in on the largest sources of digital revenue for radio stations, the Borrell/RAB survey shows targeted display and audience extension banner ads and streaming audio lead the league. Yet these are not the most in-demand digital ad units among advertisers, suggesting there is “a lot more maturing” radio can do with its digital products menu.
Meanwhile, stations selling digital services have become almost ubiquitous with 81% now selling at least one type of digital service. The most common services sold by radio are search engine optimization, social media management and website design & development.
In the survey, radio managers were asked, “What would have the most positive impact on digital sales?” The sample was asked to pick one response. Training existing sales reps came in first in the latest data, selected by four out of ten managers (40%), down from 48% in 2020 but up when compared to 35% in 2019.
But the biggest news is a threefold increase in those who think more and better digital products would have the most positive impact on sales. It was selected by 35% of managers surveyed, up sharply from 11% one year before and 22% in 2019. Adding digital-only sales reps came in third place at 17%, down noticeably from 32% in early 2020 and from 29% in early 2019. Replacing existing sales reps with better ones came in last at 8%, even with 9% the year before, and down from 14% two years ago.
Tying all the data together shows 2020 was a great year to have a solid digital strategy. But 2021 is going to be an even better year for one. That’s in part because advertisers are holding back their spending during first quarter. “We’re still hearing crickets,” Borrell said, even though there is a very large spending increase planned for 2021 compared to 2020. With 73% of advertisers indicating their budgets are flexible for 2021, now is the time to have a strong digital strategy in place and to be engaging with advertisers. “It’s a great time to be in there influencing people,” said Borrell.
With digital on track to supply 17% of radio revenue in 2021, some may now see it as the linchpin for radio. Others will go back to believing their core product is radio. “You have to think a little deeper than that,” Borrell warned. “Your core product is going to be results, how to get results for the advertiser.” And while study after study shows radio gets results, advertisers are looking for a range of digital products beyond radio to include in their marketing mix. The bottom line: make sure they’re getting those digital offerings from you so they don’t have to go somewhere else for them.