Age of Audio: Radio’s Reliability, Podcasts’ Explosion, and What it all Means for Advertisers
Let’s be honest. Inflation stinks.
But if you can step back and just observe inflation, temporarily separating yourself from its effects, it’s a truly fascinating slice of life - expanding how we’ve constructed society, and in particular - the economy. And when there is economy, there is advertising.
Let’s go to a different time, one not too far back. Early 2020. The world goes into a lockdown. Commerce essentially shuts down, and the federal government prints a bunch of money into our pockets - so we'’ll use it and send Amazon’s stock price to Saturn. Then, inflation arrives from all this newly-created currency. Amplified by supply chain woes, costs then go up, forcing consumer spending to go down, which prompts advertising spending to go down. And here we are, in 2023, shrouded in mystery.
We reiterate this timeline to highlight that just about every aspect of our economy - and business world - operates in cycles.
But one distinct thing about these cycles is their illumination of a special tool, one that will fuel the future of advertising. That future is audio. What is the current, and forward-looking status of audio formats? How will how advertising function within them through the upcoming years?
Let’s dive in.
Local Radio Advertising: Ol’ Reliable
214 million people in the U.S. listen to traditional radio today. That’s just under ⅔ of our total population. Now, we must mention that radio listenership is down a measly 3% compared to 2008. 3%! Sure it’s not growth, but virtually nothing has grown in those 15 years because of the expansion of platforms, content, streaming, and digital entertainment. A 30% drop would be steep but understandable. A 3% drop is a highlight of resilience.
But what makes it so resilient? The same thing that makes it so dependable for advertisers - passion.
People love their local radio. They love the on-air talent they view as friends, neighbors, and all-around great company on a work commute or while cooking. People connect with local talent and trust their local voices. They love the feel & vibe, and certainly express interest about the local businesses sponsoring what they’re hearing.
As for advertisers, the reason radio is a magic wand for them goes beyond the guarantee of highly engaged listeners. It’s that reaching them is cost-effective.
Let’s go back to inflationary cycles. Saving is more important than ever now, so methods of advertising that are light on the wallet should be priorities one, two, and three. Radio is the best bang for your advertising buck because it is incredibly simple to produce compared to, say, television ads or social campaigns. And that simplicity comes with no sacrifice of quality.
So while radio has remained a fixture in audio and advertising, what has taken a tiny bit of its lunch?
Podcast Advertising: Up and to the Right
There has not been a year in which podcast listenership and advertising spending has declined from the previous. Interestingly enough, it could well happen for the first time as we emerge from the pandemic. Still, there’s no denying that podcasts will be a force for some time that advertisers can capitalize on.
In 2019, podcast ad spending clocked in at $700 million. 2021 brought $1.34 billion, almost doubling the sum in just two years. 2023 is projected to see an eye-popping $2.2 billion spent for pod ads.
For businesses, there is overlap in how you choose where your advertising dollars go. As in radio, where you can select the stations that speak to your target demographic, podcasts let you go arguably a step further. You can locate the ones that are exclusively about your business or industry.
Additionally, this volcanic eruption of podcasts means that more and more are local; not just the nationally-targeted Crime Junkies or Joe Rogans of the world. In fact, NPR released a list of them!
Audio: New & Easy Opportunities
With convenience comes growth. Audio can be taken everywhere - the car, the gym, the kitchen, the work station, the girl’s night out, even the man cave. On top of podcasts and radio, streaming platforms are highly effective in speaking to customers who want to spend money.
And it’s not just what audio provides, but how it provides it. Authenticity is desired more than ever, as opposed to the polished and often fake feel of most older mainstream advertisements.
In case you are not convinced that audio is the future, I’ll offer one single statistic that doesn’t even have anything to do with any specific program; the worldwide market for earphones and headphones was valued at $25.1 billion in 2019. Think that’s a lot? Hope not, because it’s anticipated to grow at a compound annual growth rate (CAGR) of 20.3% from 2020 to 2027.
Big Picture Means Big Mystery…Just not for Audio
Times may still be tough, economically speaking. 2023 could feel like 2022, and maybe even worse. Forbes broke down big-picture projections for all media platforms, but even with such informed hypotheses, we just can’t know for certain. But what we do know, is zigging when your competitors zag is a sure-fire way to win in the long run. Be greedy when others are fearful, as Warren Buffett puts it.
So if you have a local business, or someone you know does, the case can be made there’s never been a better time to go full throttle into reaching the most engaged listeners in the Treasure Valley - something Iliad Media Group can proudly claim to have. So let’s get to it, and make 2023 your best sales year yet.
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