As Americans increasingly move away from cable and broadcast TV, advertisers are scaling back spending on linear TV and shifting more of their budget toward digital media — a surging component of the overall radio revenue landscape.
This year it’s anticipated that advertisers will spend more on digital platforms than on traditional TV. This continues an industry shift that began in 2020, when digital media received just 29% of ad budgets vs. 71% for linear TV. This year, according to an IAB/Guideline report, digital media is expected to capture 52% of ad spend, surpassing linear TV’s 48%.
But some components of digital — like social media — still haven’t won over legions of fans. A recent study found that 51% of social media users ignore branded posts, and 81% believe sponsored content either has no impact or a negative effect on their view of the company.
Looking ahead, 69% of companies plan to increase digital ad spend, while 27% intend to reduce national TV ad budgets, indicating the shift toward digital media is set to continue.
The latest annual digital revenue benchmarking report from RAB and Borrell Associates found a 6.8% increase in radio’s digital revenue in 2023, which reached $1.9 billion. This rise represents a notable improvement from previous years. In 2022, radio stations earned $1.8 billion from digital sales, reflecting a remarkable 21.1% growth vs. 2021. The report also indicates that digital sales comprised 21% of radio’s total ad revenue in 2023, underscoring its substantial market presence. This year radio is expected to continue its growth trajectory, with digital ad sales projected to exceed $2 billion.
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