Costs & Revenue Forecasting

Community radio stations in Australia are limited by the amount of commercial revenue they can raise by only 5 minutes on-air advertising per hour.

There is no restrictions on the amount of digital revenue they can generate.

This Digital Hub is an infrastructure that can be run in it’s current state on a small or large scale. The idea is to have the framework and processes set up ready for expansion, but without significant setup costs.

WAYS REVENUE CAN BE GENERATED

REVENUE OPPORTUNITIES FOR MEMBERS

Increased commercial digital revenue from advertising banners and client integrated content.
Increased digital inventory (page impressions) for local sales team to sell.
Increased visitors to the website who will then be exposed to listening to the radio station, and then becoming donors. This content will also act as external marketing content on social media, bringing new people to the brand who may have never heard of the station before.
Earn sales commission from selling advertising inventory on other station’s websites.

REVENUE OPPORTUNITIES FOR CMAA

Negotiated commission on advertising revenue earned from the websites and other client activity CMAA is involved in. Our aim is for 20% of digital revenue which in our forecasting is $158,234 per year.
Digital service fees from members who need help getting their websites ready and training on using WordPress.
Digital service fees to help members with their websites on an ongoing basis – running competition plugins for increased web traffic, advice and creative solutions for advertisers, client integrated content, adding web links to member’s social platforms, production costs of designing web banners etc.
Sales commission on advertising if CMAA is the one selling the advertising space.
Syndication fees chargeable to organisations who want to use CMAA’s Digital Hub to get their content onto websites we syndicate to. Example: national shows, news providers who are charging members for their on-air content.
Content subscription fees from organisations who want our Digital Hub content, but not advertising.

More information on banner advertising, how Google DoubleClick works or detailed further information on revenue outside of banner advertising.

COSTS

COST TO MEMBERS

It is our aim to provide content freely to member organisations in exchange for a share of commercial revenue generated from their website.

There will however be some set up costs involved if members need CMAA’s help to get their websites ready to receive content and advertising. These costs may vary between relaunching their websites onto our common technological platform WordPress or making adjustments in the design/layout of their current WordPress website to fit advertising banners and display content.

COST TO CMAA

By starting out small and growing as revenue starts coming in, it’s the aim to keep costs to a minimum.

The only major cost in the start up phase will be CMAA employee time to:

project manage the hub
get members and their websites set up
work with MSA and sales reps to start selling advertising
managing the DoubleClick inventory
producing content to syndicate to members daily
sourcing content providers who want to have their content syndicated across our network without charge.

In this beginning phase she will be able to manage time as part of her full time role and will communicate with Nathan Brown when there is cost-benefit to bring in additional help to manage advertising inventory and produce content.

To date, to get the Digital Hub set up and ready to start facilitating content and advertising, it has only cost a few hundred dollars (excluding employee salaries).

FORECASTING POTENTIAL REVENUE

Our goal of this Digital Hub is to create increased digital inventory (ad unit impressions) for our sales teams to sell. To do this forecasting I have used a sample group of stations: Hope, Light, 96Five & Vision. All data is combined to maintain the privacy of individual organisation’s data.

Revenue forecasting is based on the assumption that advertising is sold at industry average rate of $30 per thousand impressions (CPM) and each page has 2 adverts.

WHERE WE ARE NOW & CURRENT POTENTIAL REVENUE

Over the past 12 months the 4 stations combined receive on average:

56,352 monthly unique visitors
Each person visits the website 1.6 times per month (total average sessions of 89,495)
During each visit, people generate 3.4 page impressions.
303,347 monthly page impressions (a potential monthly revenue of $18,200)

WHERE WE WANT TO BE IN 12 MONTHS TIME

I like to be prudent when it comes to forecasting, so I see these targets as realistic and achievable goals.

Monthly combined average from our sample group of stations

30% increase in monthly unique visitors taking us to 73,257 monthly unique visitors
Each person visits the website 3 times per month (total average sessions of 219,771)
Each person generates 5 page impressions per visit
1,098,855 monthly page impressions
A potential monthly revenue of $65,931 or annually of $791,176.

Factors that could decrease potential revenue are discounting and unsold inventory, however the purpose of this presentation is to show potential revenue.

After the initial 12 months, we would hope to achieve an increase in monthly unique visitors by 2.5% per month. Using the above formula and visitor frequency and impressions per user staying static, here’s how our long term growth and potential revenue as a sector could look.

We also aim to create additional non-spot revenue opportunities to generate income.

CMAA’s share of the revenue will be based on level of digital management required by each organisation.

POTENTIAL REVENUE SHARE OF REVENUE PER ORGANISATION

Based on potential annual revenue after 12 months of $791,176, here’s how the share of revenue might look.

20% sales commission to organisation who sold advertising inventory ($158,234 per year).
20% CMAA project management ($158,234 per year). See what this fee covers here.
55% to organisation whose website advertising displayed on ($435,147).
5% future development fund ($39,559).