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June 07, 2006

Radio Advertising Down, But Not Out

Threats to the radio industry seem to be everywhere. It’s the “old media” and everybody seems ready to jump ship. The i-pod revolution and satellite radio are leading the attack. With the recent reports of radio industry revenues on the decline, one could be tempted to begin writing the obituary.

Mark Ramsey of Hear2.0 points to a study that suggests this is all over-reaction.

In a national study busting one of the biggest myths in the radio business, hear2.0 has found that 74% of all terrestrial radio listeners are satisfied with what they hear on the radio.

What's more, this satisfaction exists across all demographic groups - even teens.

We leave it to Mark to provide the substantiation for his research findings but assuming the study was of scientifically sound methodology, it provides solid evidence that terrestrial radio is here to stay.

Intuitively we agree. Satellite radio isn’t yet showing profits or subscriber trends that make it a long term threat. And contrary to popular perception, satellite radio does contain advertising. The long term impact of the i-pod explosion, which is based on a fast changing storage technology, is unknown and at worst will simply force radio into an evolved value proposition.

From a direct response radio advertising perspective, the supposed threats to terrestrial radio don’t concern us. Radio still reaches all the attractive target customers, it’s still excellent at targeting them, and the combination of falling industry revenues and increased competition with other mediums means there’s more low-cost remnant time available for our direct response clients.

Posted by Jeff Small & Brett Astor at 01:47 PM | Permalink