The perception of media audiences is skewed by prevalent myths in the ad community. Duncan Stewart, Director of Research, Technology, Media & Telecommunications at Deloitte, puts it best: “Why do people think that nobody listens to radio anymore? Because there is a narrative that new media kills old media, so nobody bothers to look at evidence that doesn’t fit the narrative.”
Let’s challenge the narrative and look at some evidence. Using data from research leaders Nielsen, the Federal Reserve, and Edison Research, we disprove eight of the biggest perceptions brands hold about AM/FM radio.
Here are the realities of consumer media behaviors:
Perception #1: “Due to the pandemic, no one is listening to AM/FM radio.”
According to the latest Nielsen Fall 2020 Nationwide Report, AM/FM radio has retained 95% of its persons 18+ reach from the Fall 2019 survey. Nielsen’s Nationwide study aggregates total American AM/FM radio listening from all 253 Nielsen local markets and all U.S. DMA markets.
In Fall 2020, persons 25-54 weekly reach among those with a $75,000+ annual income was 99% of what it was in Fall 2019. Persons 35-64 weekly reach among those with a $75,000+ income was 101% what it was in Fall 2019.
Perception #2: “Due to the pandemic, everyone’s working at home and no one is commuting.”
According to the U.S. Federal Reserve, 60% of employed Americans are commuting every day, a sharp contrast to the perception.
In January 2021, Advertiser Perceptions, the leader in researching advertiser and agency sentiment, fielded a study of 300 media decision makers. They asked, “What percentage of American workers are either working from home daily, commuting some days, or commuting every day?”
Here are buy side perceptions of the state of the American commute:
Marketers and agencies with media budget responsibilities perceive that 38% of U.S. workers are working from their homes every day. They believe only 33% are commuting every day and 29% are commuting some days.
Recently, the U.S. Federal Reserve released the latest results from their ongoing tracking study of American worker commutes. The Federal Reserve’s most recent study was for January 2021, the same month of the Advertiser Perceptions industry survey. How did the reality stack up to what marketers and agencies believe?
- Marketers and agencies dramatically underestimate the number of Americans who are commuting to work each day: Per the U.S. Federal Reserve, 60% of U.S. workers are commuting every day. Marketers and agencies think only 33% are commuting daily. Actual U.S. daily commutes are double the advertiser perception.
- Marketers and agencies overestimate the number of Americans who are working from home: Per the U.S. Federal Reserve, 24% of workers are working from home daily. Marketers and agencies think the percentage of those working from home is 38%.
- Marketers and agencies overestimate the number of Americans who are commuting some days: The Federal Reserve says 16% of workers are commuting some days. Marketers and agencies perceive 29% of workers are commuting some days.
Perception #3: “AM/FM radio has very low reach.”
The reality is AM/FM radio has massive reach. A study by Advertiser Perceptions found marketers and agencies believe AM/FM radio’s weekly reach is 57%. A massive miss. In reality, 88% of all Americans are reached by AM/FM radio on a weekly basis, according to Nielsen’s Q3 2020 Total Audience Report.
Perception #4: “Audience shares to Pandora/Spotify are nearly equal to AM/FM radio.”
Edison Research reports AM/FM radio is twenty-one times larger than ad-supported Spotify and ten times that of ad-supported Pandora.
Marketers and agencies told Advertiser Perceptions they feel audience shares of AM/FM radio are pretty similar to Pandora and Spotify. The buzz is wrong. The share of time spent listening to AM/FM radio dominates the two streaming audio services.
Perception #5: “In the world of the connected car, the number one thing people do in their vehicles is stream online radio on their smartphones.”
AM/FM radio still rules the road. Among ad-supported audio, AM/FM radio has a dominating 88% share of in-car time spent.
Perception #6: “Today’s optimal media plan: Put all of your money into TV and digital.”
Adding AM/FM radio to the TV and digital plan generates incremental reach for the same spend. While TV and digital are mass reach media that will deliver audiences, AM/FM radio is a powerful tool for marketers and agencies.
To illustrate, here is a case study with two approaches analyzed by Nielsen Media Impact, the media planning and optimization platform. The media plan on the left represents a typical mix of 68% linear TV, 20% digital, and 13% connected TV. That plan achieves a 57% reach.
The media plan on the right, with the exact same budget, keeps linear TV, digital, and connected TV in the plan and allocates 10% of spend to AM/FM radio. This plan generates an astounding 80% reach. The same budget yields much bigger reach. Putting AM/FM radio into the plan at a modest 10% allocation lifts reach by an impressive +41%.
Perception #7: “I would love to consider audio. However, there’s a total lack of ROI and sales lift evidence for AM/FM radio.”
Since 2013, Nielsen has conducted over a dozen return on investment studies across a variety of consumer categories that prove that AM/FM radio generates significant positive return on advertising spend.
Nielsen has found time and time again that AM/FM radio delivers impressive ROI. For example, for every $1 invested in an auto aftermarket AM/FM radio campaign, there is a $21 sales return. The Nielsen ROI data showcases AM/FM radio’s proven track record as a sales driver.
Perception #8: “AM/FM radio listening only happens during drive times.”
61% of total American AM/FM radio listening occurs outside of drive times. Many Americans listen to AM/FM radio during middays and weekends.
When thinking about traditional AM/FM radio, advertisers and agencies believe 30% of listening occurs during weekday morning drive, 6AM-10AM, followed by Monday-Friday afternoon drive, 3PM-7PM, at 25%. Middays, 10AM-3PM, were third at 14%, narrowly inching out nighttime and weekends.
Nielsen Audio shows there is a stark difference in perceived and actual AM/FM radio listening. The highest share of time spent among adults 25-54 is middays, 10AM-3PM (26%). Morning (19%) and afternoon (20%) drive times are also strong.
Why does Monday-Friday, 10AM-3PM have more listening than either morning drive or afternoon drive? Monday-Friday, 10AM-3PM is a five-hour daypart. AM and PM drives are only four hours per day each.
There is also a major disconnect about weekend listening. Advertisers perceive only 12% of all listening occurs during the weekend. The Nielsen reality is 21%, bigger than morning drive.
The prevailing narrative is wrong. Know the realities:
- AM/FM radio has retained 95% of its persons 18+ reach and 100% of its reach among those with a $75K+ income.
- Per the U.S. Federal Reserve, 60% of U.S. workers are commuting every day. Only 24% of workers are working from home every day.
- 88% of Americans are reached by AM/FM radio weekly.
- The audience share of AM/FM radio is twenty-one times larger than Spotify and ten times larger than Pandora.
- AM/FM radio rules ad-supported audio in the car.
- Adding AM/FM radio to the media plan generates a +41% increase in reach with the same spend.
- AM/FM radio delivers excellent ROI across various categories.
- 61% of listening occurs outside of drive times. Middays and weekends are far stronger than advertisers perceive.
Pierre Bouvard is Chief Insights Officer at CUMULUS MEDIA | Westwood One.
Contact the Insights team at CorpMarketing@westwoodone.com.