Commercial radio growth shows ‘changing perception’ of audio
Commercial radio has had a “positive” start to the year with 5.2% growth in Q1, according to new figures.
Radiocentre, the industry body for commercial radio, has revealed that commercial radio revenue was “back in growth”, with local advertising up 13.8%, branded content by 8.5% and national advertising by 3.9%.
Annual radio revenue for 2023 was £715m — a 3.4% drop from the previous year, which reached £740m.
The latest Advertising Association/Warc report forecast radio spend to increase by 2.3% this year. Online radio revenue forecasts suggest “healthy growth” of 7.5% — something that aligns with recent trends of online audiences growing.
Figures for full-year 2023 show that The National Lottery, now operated by Allwyn, was the biggest spender in radio at £19.8m, marking a 11% increase year on year.
Amazon, Unilever, Three and Morrisons all more than doubled their spend on the medium last year.
Radiocentre CEO Matt Payton said: “We’re pleased to see radio ad revenues start the year so positively and that so many big brands continue to invest in the medium. With commercial audiences still at record levels, radio remains strong and offers advertisers huge reach and scale.
“While there is still a degree of economic uncertainty ahead for everyone, things are starting to look more encouraging for the ad market as a whole. These figures show us that advertisers recognise the power of radio in helping their brands stay in good shape while we navigate our way through.”
Analysis: Changing perception
Joe Box, AV account director at Hearts & Science, was “not surprised” that audio was growing since a lot of the barriers and challenges for investing in radio from 10 years ago “do not exist now”, highlighting audio’s resilience, strength in short- and long-term ROI and flexibility, where advertisers can be reactive and make campaigns live very quickly.
In particular, the growth in branded content and local advertising “stood out most”, showing there was “a changing perception about audio” — brands may have previously leaned more on TV for branded activity and there was clearly demand from advertisers and consumers for local content.
Box also pointed to commercial radio groups’ increased investment into talent and tech. This is exemplified by Jordan North joining Global’s Capital Breakfast this year and Ken Bruce moving to Bauer’s Greatest Hits Radio last year, along with first-party data opportunities on Global’s Dax and Bauer’s upcoming full version of Rayo.
All of this improves the quality of commercial output and “only helps encourage brands to spend more around brand-safe, quality content”, he added.
Digital direction
Looking ahead, Box said it was important to compare 2024 commercial radio revenue with 2022, which was a record year in terms of investment in the medium, whereas 2023 was a more challenging media environment.
Another focus will be seeing where in the audio space spend is going, especially given IAB digital adspend figures showing digital audio spend was up 12% year on year, with podcasts a major driver, according to Box.
“Audio continues to offer brands, whether big or small, more and more opportunities by being able to play a role at all stages of the funnel. I’d expect investment to continue to follow listening trends and heading in a digital direction,” Box said. “What slice of the pie audio gets as omnichannel becomes more and more important will be interesting to keep an eye on, as we head into a world where channels are no longer planned in silo.”