In a reversal of fortunes, after many brands shifted advertising dollars to digital media, the tide appears to be shifting in favor of traditional media and, specifically, AM/FM radio. Nielsen Audio's latest reporting shows that more American adults 18-plus listen to radio on a weekly basis than use TV or smartphones. It's that broad reach, coupled with the ability to deliver rich data and transparency, that's inspiring some brands to reinvest in radio, according to Nielsen Audio's Managing Director Brad Kelly (pictured). In a recent interview, Kelly explained the resurgence with advertisers, who are having, he noted, a "light bulb moment" with radio. He also discussed how broadcasters are embracing digital audio, including podcasting and new delivery platforms, to expand their audience.
Alli Romano: Nielsen's 2018 Audio Today report stated big brands are returning to radio to advertise. What's bringing them back? How has radio improved its position in the marketplace?
Brad Kelly: The evolution of radio's role in the media mix has been exciting to watch over the past few years, and I don't believe we're done seeing dollars and advertising preferences shift. When you lined radio up against all the other platforms, it had the largest reach. That was a light bulb moment in the ad community. Much of the current thinking about how to best create brand awareness in today's unbelievably crowded media world centers on reaching as many consumers as possible.
You also have to consider all of the attention that's now being paid to concerns over transparency in the ad ecosystem. A head of branding at one of the largest consumer packaged goods companies in the world said that the days of giving digital a pass are over. Radio has for many years delivered accountability to advertisers and Nielsen has been pumping our audio data … including marketing mix modeling, return on ad spend and cross-media incremental reach. These new capabilitiesenable a much deeper understanding of how and why radio advertising works. Now, the pendulum is swinging towards radio and audio as a whole. Billion-dollar advertisers are re-discovering the power of radio and how it can augment, supplement and amplify their campaigns.
Romano: Nielsen's latest audio report shows that 93% of American adults 18-plus use AM/FM weekly, more than TV and smartphones. What is it that makes radio able to stay on top?
Kelly: There are many reasons why radio endures: It's a trusted local companion, a curated music experience, a hub of conversation about what's important in communities large and small. It continues to enrich the lives of listeners and create value for advertisers. Radio usage is tied to working patterns and being away from the home. Listening in the car is a strength of radio and it gives advertisers the ability to deliver their message just before the point of purchase. The majority of radio use comes from working consumers with higher incomes, reached while they are literally out and about in the marketplace. It's a successful combination which radio delivers.
Romano: How likely is it radio can keep its No. 1 position against digital options?
Kelly: Nielsen data shows very clearly that Americans of all ages are simply finding more time to consume media. The average American now spends 80 hours each week using media, compared to 50 hours a week in 2002. This changing dynamic -- along with the shift to digital and mobile -- presents a similar challenge for broadcasters and content creators across the spectrum. The importance of cutting through and creating compelling content only increases. In today's harried, time-starved world, compelling audio content and expanding delivery options are helping drive consumer usage. There has never been more audio available, and radio as the original audio provider is uniquely positioned to continue delivering content that cuts through. [Radio] creates conversations in the community and brings a curated, localized experience to your ears. Streaming and podcasting have become effective digital opportunities for radio broadcasters to complement and extend their massive over-the-air audience.
Romano: As AM/FM radio stations develop digital audio products, does that stand to help them grow audience or can it hurt their broadcast audience?
Kelly: What we see is 228.5 million Americans (aged 18-plus) use AM/FM radio each week, compared to 68.5 million for streaming audio, 35.7 million using satellite radio and 21.9 million listening to podcasts. Audio-based news and entertainment lend themselves well to the multi-tasking reality of modern day life, which is why the audio pie grows year after year. Radio broadcasters see these shifts, too, and are adjusting their strategies to match. They are reaping the rewards from digital growth because it gives their listeners yet another way to consume whether at work, in the car, at the office or on the way to the store. Nielsen is also moving towards total audio measurement in order to augment our radio data with all of the other ways you can listen. Smart speakers, digital streams, podcasts -- the audio landscape has changed significantly in the past decade.
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