I’m old enough to remember when rock 'n' roll was well, rock 'n' roll. And at the risk of sounding like I’m selling a Time/Life collection of '70s hits (“All in one unforgettable collection”), I can proudly say that I grew up during the golden age of music radio, certainly FM radio.
Anyone over the age of 35 can relate to this sentiment. There was something exciting about listening to Casey Kasem’s “American Top 40” and then running to a record store (yes, they were records) to purchase the latest hits. No, it wasn’t immediate like downloading iTunes, but just holding a new album cover was exhilarating. I still have a few of those covers somewhere in my garage.
I wax nostalgic about all this, as I contemplate what radio means to the advertising business both present and future. In fact, I’ll even go a step further and make a declaration: The past is about radio. The present and future are about audio.
Yes, to some degree, radio and audio are interchangeable terms.
Radio can mean satellite radio, a stream from a local news station on your mobile device, or listening to free music at work while tuned into Pandora. But that is precisely why “audio” is the better word. Parenthetically, we will be using “video” as an umbrella term to define the various streams of content that have colloquially been referred to as TV, including cable TV and online streaming of video content on Hulu or YouTube.
“Radio” is really a misleading definition. Our own Strata Quarterly Surveys have shown a consistent decrease over the past 18 quarters in ad buyers’ interest in radio advertising. That’s reflective of others surveys and ad purchasing patterns.
But -- and here’s the distinction -- the Pew Research Center’s State of the News Media annual report shows that the percentage of Americans age 12 or older listening to online radio was at 56% in 2011, up from 28% a decade earlier. Some traditional stations are actually seeing growth again -- not due to traditional listening but Internet streaming. Advertisers should take note.
This is precisely why our company will use “audio” to encompass all of the current audio platforms in use, including traditional radio, online streaming radio, and music streaming Web sites, such as Pandora and Spotify.
Some radio traditionalists might say we’re ignoring the medium. I say we’re redefining and expanding it, and the data is on our side. In 2009, when the Radio Advertising Bureau started reporting digital revenues, radio stations earned $480 million from digital platforms. In 2012, that number jumped almost 63% to $767 million.
Other audio platforms are also seeing an increase in ad buys. The first three months of 2013 saw a 35% increase in the number of ad agencies that bought advertisements on Pandora through Strata's systems.
The key for ad agencies, media buyers and advertisers is to look at radio/audio more holistically. Just as agencies now understand there is value to a 15-second ad that runs during a download of a traditional sitcom watched online, they must understand that an online feed is a viable advertising medium.
I should note for younger readers that the title I chose for this piece is a paraphrase of a 1979 hit by the Buggles: “Video Killed the Radio Star.” I first heard that song somewhere on a Chicago FM station, perhaps on “American Top 40.” My children will probably hear the same song on Pandora.