I’m puzzled by the radio industry. As I wrote in a recent Inside Radio column, it has the greatest potential and the weakest realization of the Internet’s possibilities.
Our most recent assessment of the radio industry’s efforts shows that it is on track to get $231 million from local online ad sales this year, up 5% from 2008. Sounds like a lot, until you consider that competitors in the TV, newspaper, yellow pages space are getting more than $1 billion each from local online sales.
Despite radio’s potential, I don’t see the industry achieving more than a 2% share of online advertising anytime soon. Our forecast calls for radio to see a slight uptick next year in interactive sales, growing 15% to $265 million. (This is just for local radio stations; if you add online sales from national radio sites like CBSRadio.com and ESPNRadio.com, the overall total comes to about $380 million this year.)
The “potential” comes from the fact that radio has the second-largest number of feet-on-the-street sellers of local advertising – about 18,000 in all. Newspapers have the most at 31,000, and yellow pages the third-largest sales force at about 14,000. But the radio industry also has something that no other local media competitor has: The only daily produced local entertainment program, and a deep understanding of social networking. Think of the strong affinities that form around music genres such as country, classical, adult contemporary, hip-hop, sports talk, politics, and hard rock.
Isn’t the Internet about social networking? Aren’t advertisers turning to the Internet for ways to promote themselves and connect with “engaged” niche audiences like this?
Radio operators know this business model well. A few are indeed leading the way, like Long Island Radio Group’s money-saving and coupon site, www.yourli.com. The group has branched out beyond the CallLetter.com mindset and is using the Web to reach into the space once dominated by newspapers and direct mail. Radio One is also leading with sites like www.elev8.com and www.blackplanet.com.
I wish others would take the cue.
NOTE: If you’re interested in hearing more, I’ll be highlighting some of the top performers in the industry at the Radio Ink Forecast Summit Dec. 8 in New York. If you’re planning to attend and would like to meet, please let me know. We’ll also, we’ll be delving deeper into radio’s opportunity and highlighting a few of the industry’s most innovative stations during our own conference in February. Hope to see you there!