Ad Agency Tells Clients To Expect ‘Two-Phase’ Radio Pricing In 2021.
The disruption to radio advertising last year had more to do with a general sense of uncertainty caused by COVID-19, not marketers losing faith in the medium. The latest government figures say nearly one in ten Americans have now received a coronavirus vaccine, and that is raising hopes the coming months will bring some normalcy to business trends. But one ad agency is telling its clients as that happens, “life will be different” in terms of economic realities, consumer behaviors and media usage.
“While vaccinations are ramping up by the day along with receptivity towards a vaccine, indicators are that we will not truly emerge as a country from COVID-19 until well into 2021, and that even then, it will not be a full ‘return to normal,” said Dan Cox, Digital Media Manager at Harmelin Media. “For businesses and brands, aligning objectives with these realities is crucial, and for advertisers, understanding the dynamic environment to which they will have to adapt throughout the year has never been more important,” he wrote in an agency blog post.
Harmelin, which buys ads for brands including Pep Boys, America’s Best Contacts, and Belk department stores, sees rapid changes in consumer behavior and media consumption from the pandemic. “Some consumer routines will return to a reasonable semblance of their pre-COVID selves as 2021 progresses, some routines will have evolved or been altered completely,” said Cox. He said AM/FM radio falls into the “gradual rebound” category as more people return to working in their offices and drive time radio listening levels reflect that.
As a result of more commuters switching on the car radio during morning and afternoon drive, Cox told clients to expect to see radio ad prices reflect that reality. “Plan for two-phase pricing, with current – often reduced – COVID-impacted usage levels sustained in the early months of 2021, followed by rising impression levels as the year progresses,” he said. (Not cited in the blog post is Nielsen PPM data from fourth quarter 2020, showing AM/FM radio’s cume audience reached 97% of its pre-COVID levels while AQH recovered to near March levels, up to 94% total week with strong listening in drive times.)
Cox also thinks streaming audio and podcasts will be among the “new norms” embraced by Americans. “Plan for COVID-accelerated usage or share increases to sustain throughout 2021,” he told clients. Harmelin also sees streaming OTT television services and social video sites like TikTok emerging from the pandemic as long-term consumption winners.
The net result is that like last year, 2021 will be a transition year albeit to something more positive. Nevertheless, Cox said it means brands will need to align their objectives with real-world realities. “For advertisers, understanding the dynamic environment to which they will have to adapt throughout the year has never been more important,” he said.
Short-Term Better For 2021
To help advertisers navigate the year, Harmelin Media has shared a list of recommendations it is giving its clients. Because different industries and parts of the country have been hurt more by the pandemic, it suggests advertisers evaluate each market on its own.
“Avoid a sweeping, uniform/national approach to media and marketing,” said Cox. “Conditions will vary greatly by area.” He also advises they avoid a wide-net “demo approach” in defining their audience targets, and instead identify and address consumer segments uniquely. Cox said brands should also “embrace audience diversity” in their media planning.
If clients follow Harmelin Media’s advice, they may be hesitant to sign any long-term contracts with a station. That is because the Philadelphia-based agency tells advertisers that they should be prepared to “move quickly and be nimble” in 2021. Its advice to markets is that they place buys earlier for the best rates, but at the same time be prepared to go to market quickly, and to make changes in-flight.
Cox suggests they also consider shorter-term contracts in lieu of annual deals and avoid media or marketing initiatives with long lead times. “Be prepared for quick pivots – in products and services, pricing and promos, creative and messaging – to reflect shifting consumer sentiment and needs, and a dynamic business environment,” he said.