There are many choices these days when it comes to ‘listening to your radio.” Advertisers tend to rely on their ad agency to keep these choices in line as part of a media campaign. There are few ad agencies in America that hold radio in high regard, one of which is The Radio Agency. At TRA we strive to keep abreast of these choices and listenership trends in order to serve our clients needs. Here’s a quick overview of what “radio” is today.

 RADIO TRENDS ON AIR AND ONLINE

A record has been set. By the end of 2007, online advertising spending in the United States outpaced radio advertising spending for the first time. But radio didn’t go away… what we are seeing is indicative that traditional radio is being consumed in more diverse ways within a broader sector called audio. Within that sector, digital and interactive technologies are changing both the distribution and access of audio content, and this in turn, is changing traditional business models.

Internet radio, satellite radio, podcasting, high-definition (HD) radio and mobile audio services are revolutionizing an industry that until recently remained largely unchanged for the better part of a century. Among the traditional media sectors, radio has lagged behind both television and newspapers in adapting to the emerging digital, interactive and on-demand media world. But this has changed. There are many synergies between radio and the Internet and, for the most part, they complement rather than compete with each other. Advertisers who combine the two forms of media take advantage of the unique attributes of each.

Key Radio Metrics

• Radio reaches 233 million listeners per week, according to RADAR 95.
• 95% of adults age 18-49 with a college degree and an annual household income of $50,000 or above tune into AM/FM radio over the course of a week.

TERRESTRIAL RADIO

While traditional radio continues to reach over 93% of the American public weekly, revenues for the industry have been flat over the past six years. This has led to a shifting landscape, perhaps best illustrated by Clear Channel, the largest radio company in the US, selling over 448 of its smaller radio stations. Clear Channel is also in the process of going from being a public company to a private one. CBS and ABC have also sold dozens of their smaller radio stations, as leading companies in the sector search for growth opportunities.

SATELLITE RADIO

One of the first major rivals to terrestrial radio was satellite radio. Based on a subscription model (as opposed to free radio supported by advertising), two companies, XM Satellite Radio and Sirius Satellite Radio, grew rapidly during the early part of the decade. After several years of explosive growth coupled with financial strain, XM and Sirius merged to strengthen their position in a volatile market, helping them to acquire new subscribers and maintain the ability to secure well known talk show hosts the likes of Oprah Winfrey and Howard Stern anchoring a programming line-up that serves nearly 21 million subscribers.

HIGH DEFINITION RADIO

HD radio is still in its infancy in the US and, according to recent estimates, is likely to continue to be so for some time. While an HDTV makes sense to many people, forking over money for new equipment to listen to the same radio content with a modicum of improved audio clarity has yet to catch on. The value proposition for both broadcasters and consumers has not yet been made clear.

According to M Street Corp., there are about 11,000 commercial radio stations in the US and, as of July 2007, more than 1,300 radio stations were broadcasting in HD.

INTERNET RADIO

Internet radio includes both the simulcast of terrestrial broadcasts online as well as Internet-only audio streaming. According to a recent report from Arbitron and Edison Media Research, about 29 million Americans access Internet radio regularly each week, and another 50 million access Internet radio occasionally each month. Some of the largest online radio networks, such as AOL and Yahoo!, receive between one million and two million listeners a week. Online radio has been largely complementary to traditional radio, rather than in competition with it. Yet advertisers have been slow to jump on board to the medium.  Dollars will likely continue to shift into Internet radio as more and more marketers learn how to leverage its visual and audio assets.

MOBILE RADIO

Listening to radio content on mobile audio devices is a far more attractive proposition for consumers than HD radio. Many new mobile handsets now have integrated FM radios, and satellite radio providers have teamed up with mobile operators to make their services available on mobile phones. The proliferation of portable audio devices in combination with the development of wireless broadband networks gives radio broadcasters an opportunity to make portable radio synonymous with mobile phones. Familiarity with mobile audio features will grow as these features become standard on mobile phones in the years ahead. Today, US mobile phone users are more familiar with downloading music tracks (e.g., ringtones) over the air but are less familiar with accessing satellite radio or free FM radio services.

Direct streaming of subscription (satellite) radio or free FM radio is used by about one-third of mobile audio users. The most popular way mobile audio users are using their mobile audio phone is to transfer music from their PC or music player to their mobile phone. Listening to radio content on mobile audio devices is a far more attractive proposition for consumers than HD radio. Many new mobile handsets now have integrated FM radios, and satellite radio providers have teamed up with mobile operators to have their services available on mobile phones.

This features, coupled with smart phone apps for Personalized Radio Services like Pandora and Slacker, will help grow mobile radio’s audience share in the years ahead.

The Radio Agency considers all of these options and platforms for every media plan.  Staying ahead of the curve in Sound Advertising is a core benefit our clients depend upon to maximum their impact and return from the medium of “All Things Radio.”

Tami Freeman is the Media Director of The Radio Agency. Please follow The Radio Agency’s Blog “Sounding Board” by subscribing to the email or RSS links above.Visit our website TheRadioAgency.com