Media Marketing Guide 2010

Your Media Questions Answered: Radio

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Andrew Hampp
Andrew Hampp
Who listens to radio these days, anyway? Doesn't everyone use their iPods and iPhones to hear music?

Believe it or not, radio's audience is still growing, with more than 239 million persons ages 12 or older interacting with the medium at least once a week, according to Arbitron's new RADAR 106 report. That's four million more than radio's weekly audience in 2009, a sign that the oldest broadcast medium is still finding new listeners.

In fact, network radio reaches more than 88% of adults 18 to 34, a 3% increase from the previous year, and more than 93% of African-Americans and 96% of Hispanic persons ages 12 or older. Radio's even a bit affluent -- 96% of college graduates ages 25 to 54 with an annual income of $50,000 or more still listen to radio once a week, while 88% of 18-to-49-year-olds with college degrees and an income of $75,000 or higher tune in each week. As for iPods and iPhones, 1 in 4 Americans connect their iPod to a car stereo, while 27% of the country, or 67 million people, listen to online radio every month, according to Edison Research and Arbitron's 2009 Infinite Dial Report.

OK, but do people still buy ads on radio? Doesn't everyone change the dial during ad breaks anyway?

Radio just experienced its largest quarterly revenue gain since 2000, growing 8% to $4.5 billion in second-quarter 2010, according to the Radio Advertising Bureau. The first half of 2010 is now up a combined 6%, the first yearly increases for radio since 2007. Surprisingly, a lot of that growth is driven by national advertisers, who've stayed away from the medium in recent years due to radio's inefficient measurement and buyer-unfriendly planning tools. As leading companies like Clear Channel and CBS Radio continue to integrate sales forces (not to mention bundle buys with outdoor ads for key clients), it's become easier for leading wireless, entertainment, automotive, retail and financial service marketers to place their ads in radio. Plus, people seem to be hearing them -- Arbitron's RADAR 106 report revealed that 190 million persons ages 12 or older heard at least one radio commercial a week. Arbitron's Portable People Meter, introduced in several markets in 2007, finally reached national deployment this past year and has also helped national marketers equate radio to other media on a demographic and average-time-spent basis for the first time.

What about HD Radio? Does anyone listen to that?

Not as much as the radio industry would like you to, but more than you think. Weekly tune-ins vary by market, but the HD audience can be quite high in cities like New York (74.1 share among persons 12 and older), Los Angeles (79.8 share), Chicago (85.9 share) and even St. Louis (84.1 share.) More than 2,000 of the country's 13,000 stations had been converted to HD by August, with more than 1,200 multicast channels. The consumer push to sell costly HD radio players as retail seems to have been shifted to installment deals with automotive manufacturers, with Lincoln, Audi and Kia recently signing up for standard or optional HD radio installations in 2011. Leading HD radio manufacturer iBiquity expects to have 1.2 million devices available in cars, consumer electronics and portable music players by third quarter.

Is online radio a big deal yet?

Online radio has become a solid business in recent months, with SNL Kagan pegging the market to be worth as much as $550 million by year's end. Arbitron and Edison also recently put the weekly online radio audience at 42 million listeners in 2009, up from 33 million in 2008, while ComScore reported that radio was the fastest growing online category during the month of June, with a 34% increase in monthly visitors (48.9 million total.) The growth is thanks in part to developments like Apple's acquisition of Lala; News Corp.'s purchase of and Imeem; and the continued growth of leading radio site Pandora, as well as Clear Channel's iHeartRadio and CBS Radio's Last.FM. Yahoo Music and News Corp.'s MySpace Music are also considered big online radio players, while satellite company Sirius XM has made an increased investment in online offerings to paying subscribers. Pandora is still the largest player in the space, recently surpassing the 60 million registered user mark in July due to the continued success of its mobile app as well as its linear ad-supported site.

Andrew Hampp covers cable TV, out of home and radio.
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