Despite a brutal year for ad-supported media, radio’s digital ad revenue topped $1 billion during 2020, marking a second consecutive year of 10-figure digital dollars for the industry. Radio’s digital ad sales rose 11.8% to hit $1.1 billion in 2020, according to the Radio Advertising Bureau. Digital now makes up more than 14% of total radio ad sales.
The figures are based on tracking by Borrell Associates as part of RAB and Borrell’s ninth annual digital revenue and benchmarking report.
Radio first broke the $1 billion digital ad threshold in the pre-COVID year of 2019, when revenues rose 25% over 2018. Last year’s increase, while slowed by pandemic-triggered business disruptions, “defied the gravity of 2020,” as the title of the RAB-Borrell report suggests. For 2021, digital growth is forecast to accelerate 18%, per the report.
“The due diligence the radio industry has put into expanding its digital platforms and advertising offerings over the last few years contributed mightily to the 2020 bright spot of digital growth,” RAB President and CEO Erica Farber said in a press release. “As broadcasters continue to super-serve their listeners and advertisers, RAB is poised to help in the conversation with its business and professional development offerings to meet the innovation and opportunities ahead in 2021.”
$1.3 Million In Digital For Average Cluster
The average station collected $290,150 in digital revenue in 2020 while the average market cluster made $1.3 million. But the numbers for the top five performers were much higher. The average top five performing cluster in the smallest markets pulled in $2 million while top performers in larger markets delivered $17.8 million in 2020 from digital sales.
“The pandemic actually delivered a gift to the radio industry last year,” Borrell Associates CEO Gordon Borrell said. “Stations saw very clearly how digital products can be a linchpin, especially when core-product sales are challenging. Digital kept the conversation going.”
Among other findings:
Confidence in stations’ digital strategies reached an all-time high in 2020
Eighty percent of stations offer digital sales training at least once a month
Eighty-one percent of stations are offering some form of digital services in addition to digital advertising
Nearly two-thirds of radio sellers try to include digital offerings in every sales pitch
More than half of stations flipped their sponsored events in 2020 to virtual events
Defying the Gravity of 2020
The executive summary from the report, entitled, “Defying the Gravity of 2020, Radio’s Digital Sales Rise 11.8%,” offered more color: “Last year’s annual report began, ‘Radio has officially caught the digital bug,’” it said. “That apropos statement unknowingly foretold a strange and troublesome year when years of planning paid off.
“Eighty-one percent of radio stations had made the transition from selling banner ads and streaming-radio spots and were offering what advertisers needed most in 2020: someone to help them with their digital presence,” the executive summary continues. “Advertisers needed help with their websites, help being found and help finding creative ways to manage their social media during uncertain times. In addition, more than half of all stations pivoted suddenly from holding in-person events, replacing them with virtual events.”
The results are based on an online survey of radio managers conducted in December 2020 and January 2021 consisting of 238 respondents representing approximately 2,400 radio stations. It was supplemented with data from Borrell’s database of digital revenue and expenses for11,463 local online operations in the U.S. and Canada, including 3,621 local radio stations, along with Borrell’s database of local ad spending estimates and a survey of 944 local radio advertisers.
“The radio salesperson has transformed into a trusted marketing consultant for their advertisers,” said Jimshade Chaudhari, Senior VP of Product at Marketron, which sponsored the report and a follow-up webinar set for Wednesday, Feb. 10, at 1pm Eastern. “With a pulse on the local market and deep knowledge of both radio and digital landscapes, they have the ability to offer the right marketing mix to ensure successful campaigns. The RAB-Borrell Digital Benchmarking Report re-enforces the fact that radio and digital are better together.”