Audio & Radio Media in 2017

THE STATE OF AUDIO & RADIO in 2017 + The Future Landscape

audio media marketing 2017

SUSPICIONS OF DECLINING RADIO USAGE

Without the data to indicate otherwise, it would be logical to assume traditional AM/FM radio is struggling to maintain reach in an increasingly digital world. Anecdotes on the growing popularity of podcasts and streaming services, such as Spotify and Pandora, not to mention the streaming video services that have troubled broadcast television, would naturally indicate that consumers are listening to less radio in favor of on-demand audio formats.

spotify audio media

Numerous articles published in the last few years have made similar claims. With speculative headlines that ask “Is Terrestrial Radio Facing Its Judgment Day With Fierce Digital Competition?” and “Left On The Dial: With Young People Trading AM/FM For Streaming, Will Radio Find A Home In Your Next Car?” it would appear that radio is facing difficulties as a medium, being ousted by digital and streaming audio.

Is radio truly a dying medium? Will AM/FM broadcasting soon become extinct?

A recent report from Nielsen indicates that, more likely, the opposite is true.

radio reach 2017

In the report, Nielsen’s data shows that radio reaches 93% of adults in the U.S. each week, more than any other platform, including television, smartphones, personal computers, and tablets. This considerable reach makes radio a durable medium, even as devices and content formats continue to evolve.

Less surprising is the growth of streaming audio services and podcasts. Additional findings within the Nielsen report show that from the start to the end of 2016, 37 million more people streamed audio on either a PC, tablet, or smartphone, with the greatest increase and highest total number of users coming from mobile. Furthermore, an Edison Research report on podcast consumers shows that podcasts have experienced consistent year-over-year growth, now reaching an estimated 67 million monthly listeners.

 

MORE OPTIONS COULD MEAN MORE LISTENING OVERALL

Common among articles predicting the fall of radio is the assumption that streaming audio services will replace AM/FM listening in purpose and usage. Instead, the rising popularity of audio is complementary to radio’s stability. Together, audio and radio, as forms of media, are occupying time previously spent without media or with other forms of entertainment, such as during work, throughout exercise and leisure activities, and while completing tasks around the house.

Moreover, an increase in connectivity for all audio formats/services is most likely driving the combined growth of both audio and radio. The ability to stream AM/FM radio from a mobile device or download a full episode of a traditional radio program as a podcast has helped keep the format relevant. Where streaming audio services have usurped TV and other forms of entertainment, radio remains a staple for music discovery, listening to live sports, supporting public media, and being entertained when commuting to and from work.

 

HOW DEVICES AND FORMATS AFFECT LISTENING

COMMUTING AND RADIO BEHAVIOR

Intimately tied with the persistence of terrestrial radio is its link to cars and the American commuter. When radio was introduced into motor vehicles in the 1930s, it brought radio outside of the home, which in turn laid the foundation for on-the-go connectivity and entertainment as we see it today.

The usage and importance of radio as a form of entertainment while driving has grown significantly over time. According to another Edison Research report on audio and commuter behavior, the average time American commuters spend in traffic each year has more than doubled since 1982, reaching as high as 42 total hours in 2015. Because 85% of working Americans drive to their job and 90% of these commuters turn to the radio for audio entertainment, total radio time adds up to be a significant opportunity for advertisers.

Despite recent advancements in entertainment technology within vehicles, predominately Bluetooth and hands-free connectivity with mobile devices, AM/FM stations continue to reach commuters. When it comes to choices in audio while driving to and from work, steaming audio via a connected mobile device has only supplanted compact disc players, which were a replacement for cassette players, which were a replacement for 8-track players. Throughout each advancement, AM/FM radio has persisted as a major portion of the commuter’s media diet.

STREAMING AUDIO BY DEVICE

When it comes to accessibility and audio streaming by device, the growth of mobile technology has had the greatest overall impact. According to Nielsen, at the end of 2016 more than 104 million US adults used a streaming audio service on a mobile device. Comparatively, only 30 million tablet users streamed audio, followed by 23 million desktop users in December of last year. Audio streaming increased across all devices throughout the course of 2016 with the greatest portion of growth coming from mobile.

Traditional AM/FM radio has also benefitted from mobile technology. Streaming radio applications, such as the iHeartRadio app, enable listeners to stream live radio from a connected mobile device or download regular programming in the form of a podcast. While the reach and impact of terrestrial radio is often difficult to measure, streaming AM/FM radio from a mobile device yields greater data for broadcasters and advertisers.

THE IMPACT OF SMART SPEAKERS/AUDIO ASSISTANTS

Aside from mobile devices, tablets, and desktop computers, new audio-enabled devices are impacting the growth of audio streaming and the stability of radio. While the presence of in-home AM/FM radios may have experienced a decline in recent years, new devices, such as the Amazon Echo (Alexa) and Google Home, are increasing household connectivity and are changing the way Americans consume media while at home.

A recent study by NPR and Edison Research found that 7% of Americans over the age of 12 currently own a smart speaker or audio assistant. Of these device owners, 70% say they listen to more audio at home since they acquired the device. NPR’s interest in the study was to determine the impact the devices may have on overall radio and audio consumption. The findings indicate that, as audio assistants grow in prevalence and sophistication, consumption of streaming audio and radio at home will also likely continue to increase.

 

ADVERTISING WITH AUDIO & RADIO

PROS & CONS OF ADVERTISING WITHIN EACH FORMAT

Traditional radio, streaming audio, and podcasts each offer unique advantages for advertisers looking to capitalize on increasing listen time.

   1. AM/FM RADIO

  • PROS: Market-level control for targeting, contextual relevancy (a blend of station focus and consumer base), and affordability for reach & frequency measures
  • CONS: A general user tendency to change stations during commercials, difficulty measuring radio’s impact on concrete goals unless content is streamed through a mobile application, and limited reporting of actual users reached

    2. STREAMING AUDIO SERVICES

    • PROS: Detailed targeting and reporting of user demographics, higher-impact ad units that often incorporate a visual companion banner, and the ability to measure revenue or conversions
    • CONS: High minimum spending for advertising on Pandora or Spotify, listeners that may be more distracted than on other channels, and limitations in reaching users with ad-free subscriptions

      3. PODCASTS offer advertisers a unique blend of pros and cons because all podcast content, including ads, is pre-recorded and agnostic of listeners or devices

      • PROS: High-impact ad units with hosts delivering sponsored messages to listeners, and greater attention from listeners as they consume the media type
      • CONS: A lack of targeting other than by context of the podcast, limited reporting and measurability, and less control over when an ad is heard

Despite each audio type offering significant reach, advertisers should pick and choose how they advertise across the different audio formats to best meet their marketing goals. All formats can be leveraged for large-scale awareness efforts, but each has unique positives and negatives that should be considered before launching a campaign.

 

FINAL TAKEAWAYS FOR ADVERTISERS

Despite rumors of its declining usage, terrestrial radio remains a staple of the American media diet. As a medium, AM/FM radio reaches more adults each week than any other device or medium. Additionally, the rising popularity of streaming audio services and podcasts is driving growth for all audio formats.

Devices and formats also play an important role in the growth of audio and radio. Commuters continue to actively listen to AM/FM radio, while streaming audio services are used on mobile more than any other device. As smart speakers/audio assistants grow in popularity, so too will the use of streaming audio in the home.

Finally, traditional radio, streaming audio, and downloaded podcasts all offer unique capabilities for advertisers. Whether an advertiser is trying to achieve high-impact awareness, earn local market coverage, or place highly targeted messages in front of consumers, audio and radio can be used together to effectively reach and activate target audiences.

IMAGE SOURCE: Daily Beast, Nielson, Spotify, Pexels

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