The Quest for More Radio Listeners

New Marketing Push from Industry: 'Radio Heard Here'

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NEW YORK (AdAge.com) -- What has radio done for you lately?

That's a question radio programmers and ad sellers alike have been asking consumers and ad buyers in recent years, as radio's share of the overall media mix stabilizes while online and TV continue to expand. Now the original reach-medium is hoping to reclaim some of the relevance and pervasiveness of its pre-TV heyday by kick-starting an industry-wide campaign called "Radio Heard Here." The campaign launches today at the National Association of Broadcasters (NAB) Conference in Las Vegas.
The multimillion-dollar campaign aims to actively encourage more radio listening among listeners aged 18 to 24 and 25 to 34.
The multimillion-dollar campaign aims to actively encourage more radio listening among listeners aged 18 to 24 and 25 to 34.

The multimillion-dollar campaign -- which aims to actively encourage more radio listening among listeners aged 18 to 24 and 25 to 34 -- will encompass plenty of radio airtime across all broadcast groups as well as non-radio elements including print, outdoor, YouTube and other social-networking destinations. NAB CEO David Rehr said the average consumer tends to perceive radio as oxygen. "They don't know what they'd do without it, but because it's everywhere they've kind of forgotten its value."

Radio 2020
Radio Heard Here is part of a larger initiative called Radio 2020, spearheaded by the NAB, Radio Advertising Bureau (RAB) and HD Radio Alliance. The initiative's goal is to reposition radio as a major growth medium by the year 2020, the 100th anniversary of radio broadcasting in America. In the meantime, it intends to make radio available on every device with a speaker or headphone by 2010.

"The idea is that [Radio Heard Here] becomes our 'Got Milk?'" said Jeff Haley, CEO of the RAB, referring to the popular campaign promoting milk drinking. "It's a flexible, easily-accessible phrase that can stand for a lot of things and can move from place to place to really be relevant."

But on the eve of launching its biggest consumer-awareness campaign to date, the radio industry was predicted to reach another significant milestone. And it's not one they'll be taking out any full-page ads or buying a billboard to trumpet. Zenith Optimedia's March 2008 Ad Spend forecast predicts radio will be surpassed by internet in overall ad spending by 2009, when online will get $23 billion in ads vs. radio's $21.9 billion.

Gloomy picture
The study paints an even gloomier picture for radio's growth through 2010, projecting a steady 1.6% year-over-year growth through 2010 where other media like online and cable television will see increases of 5% to 6%.

That speaks volumes to the struggles radio media-buyers face when they try to sell their new clients on adding radio to their media mix. Matt Feinberg, senior VP-director of radio and interactive broadcast for Zenith Media, said many of his clients are resistant to using radio for reasons both practical and financial. "A lot of agencies aren't really equipped to produce really good radio spots. And now that a lot of money has shifted to digital, everyone's seeing the shift from whatever core media they were doing to the digital platform," he said.

Yet, on the local side, business is thriving for many small, private-market radio stations, which are experiencing year-to-date double-digit revenue increases, according to a recent report written by Marci Ryvicker, a radio analyst for Wachovia Capital Markets. Reporting on the SNL/Kagan Radio Summit in New York, Ms. Ryvicker wrote, "The primary reason for this dichotomy is [small, private stations'] hyper-focus on maintaining and creating local relationships and their long-term (i.e. greater than 3-month approach) to running the business.

Recent boon
Over the past three months, national radio has gotten an unexpected boon due to recession-plagued retailers and automakers. "National radio exploded in the first quarter because a lot of big-box advertisers are looking to get their message out, and do it efficiently," Zenith's Mr. Feinberg said. "A lot of times if you have a TV plan, and you've maximized your reach and you want to go a little further, radio's a good way to extend your reach in a cost-efficient manner."
NAB CEO David Rehr
NAB CEO David Rehr

One bright spot is that radio's audience base is growing as broadcast TV viewership declines. Mr. Haley pointed out radio gained 3 million new listeners in 2007, yet hasn't been able to effectively monetize them in a substantial way.

Top radio groups like Clear Channel and CBS Radio have taken leadership roles in delivering new online platforms for their stations, with CBS recently aligning with AOL to power its streaming radio player. But online radio buys are harder to scale for marketers, which coupled with the continued delay of Arbitron's PPM measurement system in major markets like New York and Los Angeles, presents a bit of a conundrum for big radio spenders like Allstate. "Radio is competing with much more measurable media forms such as online and second-by-second TV. We are really looking to radio as an industry to bring themselves to the same level of measurement granularity that we see from some of the other media," said Lisa Cochrane, VP-marketing for Allstate. Allstate buys online radio when it's available, she added, but "it's really about reaching the audience for me."
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