Positive signs for radio industry

Buried in another depressing report on the decline in revenue for the radio industry is an upbeat statistic regarding online. While revenue is down 24%, online revenue is up 13%. And the numbers are getting more interesting. Online revenue has broken $100M, and I suspect that this growth will accelerate as the economy comes out of the recession in the next few quarters.

This is a good sign. It is essential for the radio industry to ensure that the dollars they are losing during this recession can come back when the economy improves. And if there is not a viable, measurable, interactive medium within the radio industry, advertisers that are demanding this will move to another medium. And it is clear by these numbers that advertisers are finding this in online radio.

Radio is actually in a unique place when it comes to "digital". The buyers of traditional media in television and print are typically not the buyers of the digital version of this media. For example, the traditional print buyers are not buying NYTimes.com banners. Nor are TV buyers buying YouTube. But internet radio buys still originate from the traditional side of the business, and that is good for radio, since they are not competing against other media for these dollars. Again by way of example, the NYTimes is competing against other newspaper websites, local websites as well as bloggers and portals like Yahoo. But that is not the case for radio who still for the most part compete against other radio properties for these digital dollars.

My point is that as long as radio can offer an effective digital medium for the audio ad - one that has real time accurate reporting, granular targeting and interactivity - it should be better suited for holding onto their share of advertising dollars, rather than bleeding it to other non-radio interactive media, than other traditional forms of media.

While I am not sure the growth in the RAB report is attributable to this phenomena at this stage in the game - long term I believe that the growth of digital radio will outpace other forms of old media/new media migration by sector. And it is important for radio groups to recognize this and focus on this growth opportunity, or they will miss the boat.