Insight Analysis: Radio Resists Adspend Trend
Radio has not been immune to the doom predictions of the adspend downturn. The Advertising Association expected average year on year quarterly growth would be 9% in 2001, down from an average 11.2% during 2000. The first quarter growth of just 0.8% this year appeared to confirm fears and AA estimates expect the second quarter to show a year on year fall of 4.3%.
Peter Cory, director of media planning at the Radio Advertising Bureau (RAB) thinks that Zenith’s positive attitude, “reflects longer term trends in consumer’s relationships with media and the impact this will have on media planning.” Pointing to our increasingly “time starved” society, he argues, “The time that consumers can dedicate to primary media will inevitably be eroded and the role of radio as a complimentary medium will benefit”
It must be acknowledged that commercial radio saw falls in audience share being recorded by RAJAR for much of last year. Nevertheless, it is usually recognised that in hard times advertisers favour cheaper media. Last year the RAB produced research suggesting that radio advertising may be three fifths as effective as TV advertising, for around one seventh of the price.
Cory sees the internet, which partly caused the current adspend worries, as an example of the cost-conscious client attracted to radio. With less cash to burn, he argues, internet companies are looking for “better efficiency of adspend, not only in terms of more bang for their buck but also in driving core audiences to their sites.” In this respect commercial radio is “unique amongst offline media” as research shows radio listeners are more likely to use the internet.
Radio may also be bucking the downturn because the focus of the recession is within TV. With this sector claiming almost half of all adspend, any decline here will be reflected in “All Media” figures. Radio therefore may look as though it is doing well in comparison, although the 10.6% growth at the top end of the AA’s expectations for this year falls short of the 15% achieved in 1998, the 12.4% in 1999 and even the 10.8% of last year.