Ad Execs Need Lesson On Radio Reach—Survey.

INSIDERADIO

August 19, 2015

The radio industry has been taking a victory lap ever since new Nielsen data showed its audience reach is as pervasive as ever—despite an onslaught of digital competitors. But new research shows a wide gulf between the reality of radio’s huge number and the way advertisers perceive it. More than a dozen radio companies commissioned Advertiser Perceptions to survey advertisers and agencies about radio’s audience—and that of its digital audio rivals. Conducted from May 11-May 14, results from the study of 327 advertising decision-makers underscore radio’s perception problem when the view from Madison Ave. is compared with audience metrics from Nielsen and Edison Research. Advertisers surveyed estimated that 64% of Americans are reached by AM/FM. Nielsen shows radio’s actual weekly reach to be 93%. Another disconnect surfaced when advertising execs were asked about the share of audio time spent with radio and streaming music services. They perceived the share of time spent with Pandora and Spotify to be nearly the same as AM/FM. However, AM/FM’s share of audio time is nine times greater than Pandora and 17 times greater than Spotify, according to Edison’s Share Of Ear study conducted in the second quarter. Similarly, advertisers and agencies that participated in the survey said they believed Pandora and Spotify reach 27% and 20% of Americans, respectively. In reality, Pandora reaches 15% of Americans and Spotify 5%, per Edison.

Radio Must "Aggressively Market" Reach Success. Industry leaders have long said that radio has a perception problem, not an audience problem. A new study of agencies and advertisers from Advertiser Perceptions substantiates that claim. Commissioned by Cumulus Media, iHeartMedia, Alpha Media, Beasley Media Group, CBS Radio, Cox Media Group and seven other radio companies, the perception vs. reality study is earning high marks from group executives. "Advertisers and agencies drastically underestimate the reach of AM/FM radio," commented Lew Dickey, CEO of Cumulus and Westwood One. "This study is the first conclusive evidence of the major gap in actual and imagined performance of AM/FM and streaming outlets." Bob Pittman, CEO of iHeartMedia, said the new research "makes it clear that while TV and new forms of media may get more attention, they don’t come near the reach of radio; radio is truly the mass reach mobile media." "Radio’s reach has remained consistent despite new forms of audio programming and an increasingly fragmented media landscape," said Andre Fernandez, president of CBS Radio. "Streaming has proven to be a popular platform, but not at the expense of radio’s growing total audience." Research showing a wide chasm between radio’s actual penetration and advertiser assessments is only half the battle, according to an executive who allocates ad dollars for major brands. "As a marketer, I’ve always found radio to be a medium that effectively and efficiently delivers reach over an extended period of time, while driving ROI within the total communications plan," said Mark A. Kaline, a former head of media at Ford Motor Company and Kimberly-Clark who now operates his own consultancy. "But radio has been too low profile with brands, especially in light of other advancements in technology. Radio needs to be more aggressively marketing their story as the leading mass reach media."