Radio Sales Café

I was looking for some information on radio revenue split for direct and indirect advertising in USA.

 

The US has three main radio revenue streams: National, Network and Local.

 

I am looking for another layer of information .i.e direct advertising vs indirect advertising( advertising booked by advertising agencies/ Media agencies).

 

For example the split is approximatlely 65/35 in Ireland and the UK.

 

I would be very grateful if anyone could help me with this information.

 

Thanks

 

Nuala

Nuala,

Are you referring to the station/salesperson split for advertising that is placed by an ad agency? Undoubtedly there are variations from station to station and market to market, but one of the following scenarios would likely apply:

1) If the agency business is booked by station management as a "house" (station) account, without account executive (salesperson) involvement, then the station would keep 100% of the net billing (85% of gross, the other 15% being withheld by the agency as their commission).

2) If an AE/salesperson works with the agency and is involved in servicing the buy, he/she would probably be paid whatever the standard commission is at that station, probably between 10% and 20% of the net.

Are you saying that salespeople in Ireland and the UK earn a 35% commission, or am I misinterpreting your example?

Best,

Rod

Rod

Thank you for replying to my message.

I apologise - I didn't make myself very clear.

In Ireland, a radio stations revenue stream comes from two sources - a Media agency and/or direct advertiser. The latter could be the local shop/restaurant or car shop.

The total radio revenue market in Ireland is estimated to be worth €130 million. Approximately 70% of this revenue is booked by Media agencies on behalf of the big advertisers. The other 30% comes from the small local advertisers.

I am trying to get an idea of what the split is in the USA market.

I hope this is a bit clearer and thank you again

Best Nuala

Nuala,
Presently our Jacksonville, Florida clusters' revenue is approximately 78% agency and 22% local direct. These percentages vary dependinig upon the format. Ideally, we would prefer a spilt closer to 60/40 and we are working toward achieving that goal.
Hope this helps.

Charlie Jennings GSM
Renda Broadcasting

Charlie

Is that split of 78%/22% typical for Radio in the US?

Thanks
Nuala

That is the current split for our cluster.
Our market is presently ranked 46th in the USA.
The higher ranked markets will typically have a higher percentage of agency business, while lower ranked markets will rely more on local direct.

For example, earlier in my career I worked in a market ranked 256.
85% of our revenue was local, with only 15% agency.
Within each market some radio stations are ranked higher than others.
Those stations with better ratings are in a stronger position to attract agency business.

Sorry, but one size does not fit all in this scenerio.
Charlie

Thanks Charile - appreciate this information

Nuala