I haven't paid much attention to the radio business lately (which is why I'm just now responding to month-old news) but was curious today about radio revenue trends. The RAB release of May 16th, 2014 says that revenue was flat in Q1 2014 as compared to Q1 2013. It reports that spot was down 2%, network down 8%, digital up 16% and off-air revenue up 16% to get to $3.795 billion for both quarters. The conclusion one could draw is that spot revenue was down but bailed out by growth in digital and off-air revenue.
But is this an accurate picture? It could be, but I wonder. There can be significant pressure to increase alternative revenue sources, especially digital. Otherwise, you are wide open to criticism that you just don't "get" digital. But the breakout of revenues is not necessarily precise. If under pressure to get an ad buy, I include digital products to seal the deal, the agency may not want or be able to justify a higher radio CPP. Or, maybe the agency places no value on digital whatsoever but the radio manager needs digital revenue so he includes it at the same price. So while most or even all of the value to the agency or advertiser might be on over-the-air spot, both parties in the transaction have an interest in assigning, say 80% to over-the-air and 20% to digital, or 70/30, or 60/40. It's just a naturally occurring situation when you bundle products.
Does anyone else question whether digital revenue is really growing as fast as radio station managers are reporting?
But is this an accurate picture? It could be, but I wonder. There can be significant pressure to increase alternative revenue sources, especially digital. Otherwise, you are wide open to criticism that you just don't "get" digital. But the breakout of revenues is not necessarily precise. If under pressure to get an ad buy, I include digital products to seal the deal, the agency may not want or be able to justify a higher radio CPP. Or, maybe the agency places no value on digital whatsoever but the radio manager needs digital revenue so he includes it at the same price. So while most or even all of the value to the agency or advertiser might be on over-the-air spot, both parties in the transaction have an interest in assigning, say 80% to over-the-air and 20% to digital, or 70/30, or 60/40. It's just a naturally occurring situation when you bundle products.
Does anyone else question whether digital revenue is really growing as fast as radio station managers are reporting?
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