Radio’s Place in the New Local Media
Advertising Marketplace

Driving on an empty road towards the setting sun and sunbeams to upcoming new 2017 year and leaving 2016 behind. Concept for success and passing time.

With only 9 weeks left before we bid farewell to 2016, we asked Mark Fratrik, Ph.D., SVP and Chief Economist with BIA/Kelsey to provide with us with radio’s outlook for 2017.

Where do local radio stations stand in the new local media advertising marketplace, especially compared to their traditional and online/digital competitors? According to the recently published 2017 BIA/Kelsey U.S Local Advertising Forecast, which provides a five year national forecast and 12 individual media forecasts, radio does reasonably well. The combination of online activities with the over-the-air advertising leads to a 10.5% share of the $148.8B local advertising pie in 2017.


This share is slightly smaller than in previous years, due in large part to the continued flow of dollars to digital/online ad platforms. Radio however maintains an important part of the overall local advertising market.

What is working for radio? Two big advantages.

First, national and local advertisers continue to utilize local radio stations as part of their overall advertising mixes. In addition to the significant dollars coming from auto advertisers, BIA/Kelsey estimates local radio stations receive 14.6% nationally of all advertising spending by finance and insurance companies and 12.3% of all advertising spending by technology companies. This spend is in large part because radio still has a unique capability to reach so many people. In particular, people in the largest markets generally commute longer distances and spend more time in their automobiles with their radios – all valuable to national advertisers, hence the strong ad spending.

Second, more than ever, stations/groups are making significant advances with online/digital offerings. They are responding to the competition of digital seriously and are not thinking of themselves as just over-the-air radio stations providing advertising inventory on their programming. Their over-the-air signal provides the bedrock of access to their local audiences, but their websites, with further news and information, and their streaming of their programming provide additional opportunities to deliver high value advertising.

Online/digital, mobile, social advertising is growing and increasingly garnering more of the local advertising dollars. One should only look at position of the combined print media/advertising platforms – direct mail, newspapers, print Yellow Pages, and local magazines – to see the impact of these new advertising options. In fact, for the first time ever, BIA/Kelsey is predicting the share of online/digital media/advertising platforms will exceed the share of the print media by 2018.

To summarize, radio’s position in the local advertising marketplace continues to be solid. The growing influence of online/digital advertising opportunities will prompt radio to be flexible and be broad in the types of services that they offer and focus on new and distinct offerings that increase digital revenue opportunities.

The 2017 BIA/Kelsey U.S. Local Advertising Report is available at BIA Kelsey.



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Advertising Marketplace”

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