Podcasts’ strong ad sales help NPR reach second year of budget surplus

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NPR is on track to conclude a second consecutive fiscal year with a revenue surplus, driven by a record increase in sponsorship sales.

The network brought in $60 million in sponsorship income in fiscal year 2016, according to CFO Debbie Cowan, marking a 16 percent increase over the previous fiscal year. Cowan discussed the numbers as she briefed the NPR Board’s Finance Committee on preliminary FY2016 financials at a meeting Wednesday.

National Public Media, an NPR subsidiary that sells underwriting and digital advertising for the network, saw increases in both broadcast and digital sponsorship in FY2016, said NPM CEO Gina Garrubbo during the meeting. Podcast income drove the growth in digital, she said, with advertisers renewing at an “extremely high” rate.

Clients’ desire for podcast plugs hasn’t affected their support of broadcast shows, Garrubbo said. NPM has even found success in convincing podcast advertisers to expand to broadcast, she said, when it points out that the radio audience is three times larger.

NPM is also using a “bolder approach” to sell sponsorships as it aims to “optimize rates based on ratings increases,” Garrubbo said, referring to NPR’s recent audience growth. It is targeting technology, financial and business-to-business clients.

“We’re asking for more money and asking for money from people who haven’t bought us in years, like American Express, or never bought us at all,” Garrubbo said.

With the “renaissance in high-quality audio storytelling” underway, “I think you can expect the growth that we saw to continue through the first quarter of 2017,” said Bryan Moffett, g.m. of NPM.

The growth in sponsorship sales came as NPR saw a 4 percent decline in development income, Cowan said. Though revenue in gifts and grants was down, NPR did succeed at bringing in multiyear funding commitments that will boost income in future years, she said.

A slide projected on a screen behind Cowan listing fiscal-year trends mentioned “increased competition and financial challenges for our acquired programs and distribution model.” Cowan did not discuss this factor.