Why the nation’s top advertisers still rely on radio
Posted on: May 1, 2018
What do Geico, Walgreens, and Home Depot have in common? They are among the nation’s top advertisers, and they continue to spend money on radio advertising. Why? Because it works. Even as streaming and podcasting alter the audio landscape, radio remains an effective medium. Here are some reasons why.
Number of Listeners
With 93% of Americans listening to AM/FM radio every week, radio reaches more people than any other medium. People listen in their cars, at work, and on the go.
Streaming audio further extends the reach of radio advertising. Forrester Research reports that 28% of U.S. adults stream music on their desktop or mobile phones, but only 6% of U.S. adults are willing to pay to access streaming on-demand radio services. That means—whether they listen to terrestrial or streaming radio—almost all Americans are listening to audio ads.
Radio reaches a diverse audience. The Radio Advertising Bureau reports that, as of December 2017, radio reaches an impressive 247,356,000 people age 12 or older every week. Ninety-five percent of Millennials and 97% of Generation X-ers are reached monthly by radio, and at least 67% of black and Hispanic consumers listen to AM/FM radio daily. Radio formats are designed to reach large groups of people with common interests, making radio an effective medium for targeting diverse audiences.
Testimonials by radio or podcasting personalities offer an alternative to pre-produced ads. These live endorsements often provide personal experiences with the brand, which build consumer trust and drive sales. According to the Radio Advertising Bureau, 55% of respondents said that hearing a favorite radio personality endorse a health care or medical product or service made them trust that product or service. Additionally, 51% of people with a favorite radio personality have considered or purchased a product/service endorsed during their favorite radio personality’s show.
In the age of the podcast boom, when one in four Americans has listened to a podcast in the past month, more marketers and agencies are harnessing the power of podcast advertising through the use of both live endorsements and pre-produced spots. According to a study by Westwood One, heavy podcast listeners are more accepting of pre-produced ads, while overall weekly podcast listeners prefer live host endorsements.
Search Engine Lift
Search engines are known for driving consumer behavior. According to Forrester Research, 71% of consumers use a search engine to discover new products or services (initiation), and 74% report using a search engine for consideration and purchasing (research, comparison, transaction).
Undeniably, search engines influence consumer purchasing. But radio drives online behavior. Based on an analysis of 2,100 local radio ads across six different categories, radio generated an average 29% lift in Google search activity. When compared to television, radio drove 228% more searches, according to the RAB.
Direct and brand response radio, by tracking the success of any given ad, enable us to see part of the picture. But the invisible effects of radio advertising are far-reaching and deserve consideration.
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Borison, Rebecca, “In-stream audio advertising an untapped marketing opportunity: Forrester,” Mobile Marketer, 2018.
“Fan Favorite: Radio Listeners Spend 58% of their Tune-in Time with Their Favorite Station,” Neilsen.com, December 5, 2017.
Radio Advertising Bureau, “FAQ’s,” 2018.
Radio Advertising Bureau, “Radio Drives Search Executive Summary,” September 2017.
“Radio Facts and Figures,” News Generation, Inc., 2018.
“Research: Radio Advertising a Win for Insurance Companies,” Insideradio.com, January 17, 2018.
“The Podcast Download Fall 2017 Report,” Westwood One, 2017