For radio, rolling with the changes
In 2012, ad spending was up and audiences grew
December 20, 2012
To listen to all the moaning out there from some radio folks, one might think radio was being chased into an early grave, beset by ominous forces poised to gobble up listeners and advertisers.
One has to wonder where all that moaning comes from. It certainly isn’t supported by the facts.
Even in this age of Pandora, SiriusXM and the iPod, radio remains a vital and growing medium, and it will continue to be so.
Radio audiences continue to grow, both online and off. A recent study found that, contrary to popular belief, those who listen to Pandora, the dominant internet radio network, do not listen to less terrestrial radio; in fact, they listen to more.
The point: Rather than signaling the death of traditional radio, these new platforms advance the cause of radio as a medium. That can only serve to benefit traditional over-air-radio.
Radio advertising has also held up remarkably well, certainly far better than that of magazines and newspapers, and it has done so through the worst economic recession since the Great Depression of the 1930s.
Ad spending increased slightly this year, spurred in part by advertisers who abandoned TV in the months before the election to avoid the crush of political ads.
Radio advertising offers the element of immediacy, whether it’s a big sale or a movie about to open.
“Radio continues to be the choice medium of retailers, seasonal product producers and automotive, providing heavy frequency and drive to retail messages,” notes the most recent ad spending forecast from ZenithOptimedia. “Fall and winter bring key sporting events that generate strong listener interest in basketball, college football and NFL.”
ZenithOptimedia forecasts that in 2013 ad spending will grow 2.9 percent, to $17.2 billion, following growth of 2.1 percent this year.
By 2014 radio will eclipse magazines as the No. 4 medium in ad revenue, behind TV, internet and newspapers.
Radio is not without its problems. It has been slow to move into digital, though it recent years it’s picked up the pace. Case in point: Clear Channel’s iHeartRadio app and festival.
Much of the medium’s growth this year came from digital revenue.
Stations are devoting more sales reps to internet-only sales. They’ve developed innovative ways to combine online and radio and are increasingly reaching out to listeners via email marketing or local coupon deals similar to Groupon.
Though Pandora does not appear to be stealing listeners, terrestrial stations are concerned about its potential to woo away advertisers.
It’s a real worry. Pandora offers two services, one premium and one ad-supported, and its ad revenue soared to an estimated $240 million this year, quadruple what it generated in 2010.
Terrestrial radio also has the specter of satellite radio looming. Despite growth in subscribers over the past few years, satellite radio has never turned into the threat to traditional that many thought it would be upon its debut a decade ago.
Really satellite’s biggest threat to terrestrial is in wooing away talent. Howard Stern, Martha Stewart and Bubba the Love Sponge are just a few who have moved to satellite over the past few years, and that list will continue to grow.
But all that said, satellite can’t trump over-the-air radio when it comes to impact. Look no further than Rush Limbaugh, whose radio show draws 15 million listeners each week, more than many top TV shows.
When Rush speaks, America listens and often reacts, setting off furious public debate.
We saw that earlier this year when the conservative talker called a law student who testified about birth control before Congress a “slut.” It was all over the nightly news. Dozens of advertisers yanked their ads from his show, and for days it seemed Limbaugh’s career was in danger.
And then it was over.
Rush moved on. Radio moved on. America moved on.
Radio’s great strength, ultimately—and in this case Rush’s blessing—is that it moves in real time, in pace with the world and events that shape the world.
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