It’s time to go all-in on digital revenue

In the News Social & Digital

By Paul Jacobs

It seems that virtually every day someone writes a blog post or gives a speech outlining what radio and television need to do to ward off threats (including yours truly) that are off on the horizon. Traditional media faces a lot of challenges and it’s hard to come up with a clear and efficient solution to many of them that can be executed at the local level. It’s hard to create a viable digital competitive option to Spotify or Netflix, or to negotiate with the car companies to get a single radio station embedded into a car’s entertainment system. You send your audience to Facebook and hope that you don’t wake up one day to find that Mark Zuckerberg had another brainstorm and you’ll have to change your approach to posting information. 

There’s a lot that’s out of your control.

Even if you wanted to solve any of those problems, stations are then faced with the challenge of finding the resources and capital necessary to execute. Finally, how much can a single radio, television station, or company really do to fight these battles, anyway?

There is one clear opportunity, and it has a low barrier of entry. I’m talking about going all-in to generate digital revenue. While national revenue might be out of your control, the shift of local dollars to digital is happening quickly, and local stations are in position to do something about it. 

Whenever I visit with a new sales staff, I start the meeting with a simple question: “How many of you want to make more money this year than last year?” It’s definitely a loaded question, and of course, every single hand in the room is raised. These are salespeople, and we all know what motivates them.  But I then follow it up with a simple statement that stops the room dead: “Then stop just selling traditional media.”

Before I give them a chance to start yelling at me I then explain the obvious – traditional media revenue is, at best, growing slowly. So if your station wants to grow its revenue, the only solution is to diversify the approach and begin to invest in re-structuring the effort to develop a much higher level of sales expertise as well as digital product development in order to take advantage of where the local dollars are heading.

BIA Kelsey just released their local revenue forecast, and you can sum it up in one word: digital. Here’s how they start off the report:

If there was any doubt that the future of local advertising is digital, the latest local ad revenue forecast from BIA/Kelsey confirms that revenue from local-focused online ads will exceed that of traditional ads aimed at local audiences by 2018.

Please note that in the pie chart below, we aren’t talking about national data. This is where local dollars are going – the dollars that your sales team fights for every day. If their main focus is on the traditional business without a strong digital effort, then sadly, it’s not a fair fight.


Here are three key points from the local study:

  • Advertising in local traditional media is forecast to fall 2.4 percent from 2016 to 2017.
  • During this same time period, local digital advertising, including mobile, will increase by 13.5 percent.
  • While radio is taking a nice 9.6 percent of local over-the-air revenue, its digital haul is less than 1 percent, and while television is taking 13.3 percent of local over-the-air revenue, it’s only generating .7 percent of digital revenue.

You can read about the rest of the study here

We have written many posts about this topic over the years, and while many broadcasters have made some moves in this direction, it is sadly too incremental to take advantage of this shift in local advertising dollars. In order to compete, stations will need to re-structure their approach into two distinct divisions – traditional and digital. Stations will need to invest in sales training, but also product development, including grappling with issues like requiring registration for streaming and other content, and making an investment in data and metrics.

In other words, station sales efforts can no longer afford to operate in much the same way as a decade ago. 

Smart broadcasters will view this as an opportunity. We know where the dollars are going, and in many cases, some product development in the form of mobile apps, websites, and even providing SEO services are available. But it’s time to go all in and look at digital revenue as its own business, with its own goals, budget, and P&L. Asking (or is it requiring?) traditional salespeople to adapt has been proven to have mediocre success, and it is too limiting. When you ask your sellers who they are calling on, chances are they’re calling on companies that advertise on radio or television. What about the other 90 percent of the businesses in your community who are spending dollars in the other slices of BIA Kelsey’s pie chart? 

So, this post isn’t about what traditional media should do. It’s about what radio and television stations have to do. If your station has started down this path, go all-in. If you haven’t, get started yesterday. This is where the dollars are moving, and where growth lies. It’s not a theory. It’s not a bet. It’s reality.

Jacobs Media is proud to be associated with the Wisconsin Broadcasters Association as part of our Digital Partnership. If your station has any questions about digital, mobile, or social media, contact us at or at 248-353-9030.