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Local radio’s digital economics

Quick follow-up on this morning’s news about KSTP-AM hiring two guys for the AM1500.com website:

I recently talked to an exec of a top-10 billing local radio station about online economics there. When I covered the Star Tribune’s bankruptcy last year, court documents showed that 7.3 percent of its 2008 revenues were digital. Because print advertising has fallen so fast, the Strib’s percentage has almost certainly gone up, perhaps into double-digits. But the radio exec pegged this station’s percentage at 16 — quite a bit further down the digital-revenue-conversion road.

The station in question hasn’t been immune to the ad slump — as at the Strib, slower conventional sales have pushed the online percentage up. Still, this isn’t a drain-circling operation; it’s profitable and spends more on talent than it did a year ago.

The exec stressed that this station’s percentage is probably on the high side — if not the highest in the market. The digital share at most radio stations may be below the Strib’s share now. However, stations such as KQ, KS95, 93X, KFAN and MyTalk107 are considered successes. (AM1500’s new hires, Phil Mackey and Tom Pelissero, worked on KFAN.com; a current Hubbard Broadcasting web manager, Jeremy Sinon, also helped develop The Fan’s site.)

Ads are mostly sold as legacy-online packages; no radio pro pretends they can go digital-only, at least not now. But given that sports is a huge web draw, AM1500’s hiring makes sense, and not just from a promotional or audience-development standpoint; there’s real cash there right now.

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Comments (1)

  1. Submitted by Rick Ellis on 03/16/2010 - 11:00 am.

    The only danger with selling primarily legacy/online packages is that it can make it more challenging to build the digital sales side. Unless you hire and train digital only sales people, the web site is always dependent on the fortunes of the legacy business.

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