Radio stations are in the business of selling ads that’ll drive leads (and sales) for their clientele. Decades of usage have proven a simple truth; radio works. But, with radio revenues set to plateau in 2020, the market for radio advertising is undoubtedly reaching maturation.
For radio companies that are aiming to grow in 2020, there are a few options: out-market the competition, deploy programs to increase SMB ad spend, or sell new solutions to capture new revenue. However, marketing is an expensive game to play, and upsell tactics take time. The fastest route to revenue in radio is through product diversification. Here’s why.
Why Has Radio Plateaued?
Radio is only set to grow 0.7%, to $18.4B in gross annual revenues by 2023. With growth rates falling under the inflation rate, margins for many radio companies are narrowing more than ever before.
Here’s how radio revenues stack up against the likes of digital over that same timespan:
Now, there are a couple reasons why radio growth has stalled.
1. Attribution & Segmentation
Radio works, but the greatest challenge in radio advertising is mapping a clear path from ad to lead and sale. The second biggest challenge is the lack of ability to precisely segment buyer markets through radio. Timing and choice of radio station are obviously factors, but they do not provide the depth of segmentation that many new digital solutions do.
2. Multi-channel Marketing
Most radio advertising clients are not exclusively relying on radio to meet their marketing needs. Most clients are using a combination of radio, traditional, digital, and otherwise. This means that less revenue ends up going to each of these individual channels, UNLESS you are a provider that can offer multiple marketing solutions to span these channels. This is both a challenge and an opportunity for radio companies that are willing to diversify their solution sets.
Take it from Gordon Borrell:
Virtually all radio buyers are buying digital, yet 75% of the average station’s customers aren’t buying digital from the station
3. Digital is Mandatory
97% of US adults under 65 are on social media at least once a month, with the majority checking in daily. These same people are averaging 2.2 hours per day on social media. Businesses cannot ignore these trends, and that’s why we are witnessing rapid growth in the digital advertising market.
Here are the stats:
- Digital ad spend in the US is projected to grow to $161B by 2023.
- Many industries (such as auto dealers) are now mandated to spend 50%+ of ad budget on digital channels.
- Selling a client a single advertising solution proves a retention rate of 30% over 2 years. Selling that same client 4 solutions proves a retention rate of 80% over the same timespan.
- Your audience is online. According to the global web index, digital consumers are now spending 6 ¾ hours a day online, with 51% of that time spent via mobile device, and 2.2 of those hours being spent on social media alone.
Adding digital solutions to a radio portfolio shouldn’t be without proper due diligence. Choosing the right solutions to align with radio ads and minimize both internal and client education will be critical. Here are the top 4 solutions for radio companies that are ready to make the leap into digital.
1. Digital Advertising
This is the bread and butter for most radio companies because it’s the first thing your local clients look for when it comes to digital. Therefore, offering digital advertising technology and services can be a great way to start the digital conversation. However, this can be one of the steepest learning curves for radio stations looking to fulfill with existing in-house resources.
Some of the alternative options include:
- Hiring digital ad specialists
- Outsourcing fulfilment to a 3rd party
- Working with a white-label digital advertising partner
Most modern radio advertising realizes a return with organic search leads. This is known as marketing spillover. This is what happens when a consumer hears a radio ad on their way to work in the morning, gets to the office, grabs their coffee, then searches up the company they heard in the ad and submits a demo, makes a purchase, etc.
As a result of this relationship, one of the best tactics to compliment radio advertising is search engine optimization (SEO). By offering SEO solutions, you can help your clients ensure that they are ranking on search for all of the keywords that matter most to them.
Radio advertising without search engine optimization might look like this:
...a consumer hears a radio ad on their way to work in the morning, gets to the office, grabs their coffee, then searches up the company they heard in the ad but can’t find the one they heard earlier, so they click on the top result—a competitor—and submit a demo, make a purchase, etc.
Some of the top options for adding SEO to your offering include:
- Working with an SEO specialist like Boostability
- Hiring internal SEO resources
- Looking for a white-label SEO partner
The next part of the SEO puzzle is ensuring that your clients have beautiful, conversion optimized websites. Without this, they stand to lose clients that do successfully make it to their websites, but aren’t happy with what they’ve found.
Here’s how radio and websites can work together:
- Partnering with a website design agency
- Hiring internal web design resources
- Working with a white-label web design agency
4. Social Marketing
You saw the stats. Today, business is done on social media. If your clients aren’t prevalent on social media, then they are missing a massive opportunity to connect and resonate with their clients. Fortunately, social media marketing is one of the easiest solutions for radio companies to provide.
Providing social marketing can be as simple as managing various social media accounts for your clients and providing a certain volume of posts for a fee. However, social media management is made much easier when paired with a multi-platform posting solution like Hootsuite or Vendasta.
Vendasta for Radio
When building out a digital portfolio, radio companies can either negotiate relationships with a number of vendors that specialize in each above area of marketing OR they can look to partner with a white-label company like Vendasta that can provide all of these solutions in a single stop.
Here’s how a white label partnership looks for a radio company:
Vendasta enables radio companies to strap digital solutions onto existing radio offerings and become multi-platform providers for their advertising clients. Vendasta also enables radio stations to outsource digital fulfilment work to a team of experts, so that radio companies can stay focussed on their core competencies. Oh, and most importantly, all of these digital solutions (and the fulfilment work to follow) are designed to be sold under the branding of the radio company.
That’s why you may not have heard of us. But you likely know some of our partners, such as: iHeart Radio and Salem Media Group.
Here’s how a Vendasta partnership works:
You pay a subscription fee (free, basic, pro, and enterprise tiers) and get unlimited access to a powerful CRM and project management software, a client facing dashboard where you can showcase proof-of-performance, and the complete marketplace of Vendasta solutions (100+) that you can leverage to start selling today.
Frequently asked questions:
- How do I create demand for new digital solutions? The Vendasta platform leverages automation to uncover current clients and new prospects that need digital solutions, plus the data to prove it and pitch it.
- How do I try my staff and sales team to understand and sell new products and services? Our platform has baked in sales education tools and we also provide in-market training for our enterprise partners.
- What is the easiest way to provide fulfilment work to accompany solutions? That’s where our white-label marketing services team can step in and complete work on your behalf.
Ready to learn more about Vendasta? Get a demo to start the conversation on how you can create recurring revenue at scale and grow forward into 2020.