Well, who saw that coming?
I think you may need to be a subscriber to Ad Age to see yesterday’s article with this link. So, I’m posting this copy and paste because everyone in Radio needs to see it. (And if you don’t already subscribe, perhaps you should.)
If you’re a sales manager or general manager or owner, for that matter, this is definitely worth your time. All special emphasis is mine:
“Procter & Gamble Co. invented soap operas on the radio nearly a century ago, but it moved the soaps and its budgets to TV in the 1950s, and for decades never really looked back. Now, the marketing giant is diving back into radio in a big way, despite a plethora of options to deeply target consumers.
P&G upped spending on the radio 43% last year to $235 million, according to Vivvix (formerly Kantar Media), led by a big jump in local radio. This came as the company, under margin pressure from rising costs and trying to minimize price hikes, cut measured spending overall by more than 10% to $2.2 billion.
…while radio doesn’t sound nearly as modern or cool as other linear TV alternatives, it’s becoming a meaningful part of P&G’s plans. This comes as U.S. media nears a surprising milestone where 18- to 49-year-olds are spending more time listening to radio than watching linear TV.
P&G actually began experimenting with broader use of radio in 2017, said Pierre Bouvard, chief research officer of Cumulus Media. The idea came from a media analyst, John Fix, who started his career in manufacturing and came into media analytics with relatively few preconceptions, he said. Fix talked publicly about the effort in 2021.
As more P&G brands tried radio and liked the results, spending grew. P&G spent $70 million on radio in 2018, per Vivvix, gradually increasing that spending even as the pandemic hit commuting and radio audiences hard in 2020. By 2021, P&G was the biggest radio spender in the U.S., even before last year’s big jump.
P&G declined to comment on specifics of its radio spending, but a spokeswoman in an email said: ‘We continue to adjust where we invest as part of our overall strategy to reach our consumers where they are, when they are receptive, and in media that resonates with them.‘
P&G’s moves come as AM/FM radio has surprisingly neared (or, depending on the measure, passed) linear TV in time spent among people 18-49 in the U.S. for the first time since such data has been collected in the Nielsen Total Audience Report. This isn’t because radio audiences are growing, but because they’ve rebounded from the pandemic and have been far more stable than linear TV audiences, which have declined at an accelerating pace due to cord-cutting in recent years.
Radio’s appeal isn’t just that its audience has held up relatively well, but also that it’s substantially different than that of linear TV. Nielsen TAR data show radio is much stronger than linear TV with younger (18-34) and Hispanic audiences in particular.
Radio increased reach beyond linear TV by an average of 44% for P&G brands in the 18-49 demo in May 2022, based on an analysis of actual P&G spending, covering markets accounting for 84% of the U.S. population. Olay Body Wash increased reach from 43% to 71% by adding radio to linear, Zevo from 43% to 72%, and Metamucil from 32% to 53%. These numbers are across the 18-49 demo as a whole, rather than any narrower target P&G brands may have been seeking.
Nielsen planning tools show ‘you can get incremental reach with connected TV, but you don’t get a lot,’ Bouvard said. ‘And it’s very expensive. The CPMs are sky-high because of so much demand. The fact that you can get sizable lifts and incremental reach pretty affordably with network radio CPMs is a surprise to a lot of brands.’
Indeed, not a lot of brand marketers appear to be aware of it. Or if they are, they’re unwilling to dive into radio the way P&G has. P&G competitors haven’t ramped up radio in a similar way, Bouvard said. And some of the biggest traditional spenders on radio—the U.S. government and T-Mobile—both cut spending 20% or more last year, per Vivvix.
But pharmaceutical advertisers, including Pfizer, Johnson & Johnson and AbbVie, have started to spend more, Bouvard said. Vivvix data show Pfizer became a top five radio advertiser last year, more than doubling spending to $125 million. And Bouvard is hoping more advertisers follow, in part because of radio’s resilience in the face of linear TV’s decline.
Radio passed linear TV (live plus time-shifted viewing) in the third quarter by 3% in total minutes spent by users of each medium for the first time ever in Nielsen Total Audience Ratings data. Linear TV was still ahead of radio by 5% in average time spent on each medium across the whole U.S. population.
Given the accelerating pace of cord-cutting tracked by MoffettNathanson, radio appears likely to pull ahead on both measures soon. That data showed a 10.5% decline in cable and satellite subscribers in the third quarter following an 8.8% decline a year earlier.
Weekly reach of radio actually pulled ahead of TV years ago, most recently standing at 83% in the 18-49 demo, well above the 59% for linear TV (down from 82% only four years earlier). It’s also been in the lead in time spent among the 18-34 demo, a big part of its unduplicated reach potential.
Still, linear TV outpaces radio handily in overall time spent per user across all demos, per the Nielen TAR data. It also remains well ahead of radio in average time spent for the whole adult population, counting people 50 and up, and among Black people of all ages.
Radio’s relative strength isn’t because it’s on a hot streak, but it’s losing audiences to streaming competition far slower than TV has lost cable and satellite subscribers. As of the fourth quarter, AM/FM radio stations (including their own streaming audiences) accounted for 67% of time spent with ad-supported audio among people ages 25-54, according to Edison Research, compared to 33% with all other ad-supported streaming formats, led by podcasts, at 18%.”
If you already knew all of this, sorry for wasting your time.
If not, well…you should know what to do next.