Note to media buyers: last year's frequently-used media plan allocating two-thirds of spend to linear TV, and the remaining third to connected TV and digital media, will reach 12% fewer persons 18+ now, according to Nielsen.
In fact, Nielsen Media Impact's analysis shows that not only does the mix of 65% linear, 10% CTV, and 25% digital result in lower reach than a year ago, but shifting spend to more digital and CTV to compensate for linear's declining audience does not significantly increase reach, regardless of how that mix is adjusted.
“Can increasing connected TV and digital media allocations fix all of linear TV’s woes? Unfortunately, no,” Cumulus Media/Westwood One Audio Active Group Chief Insights Officer Pierre Bouvard says in Westwood One's weekly blog. “[While] it is commonly accepted that increasing connected TV’s portion of the media plan can solve for linear TV’s audience erosion, dialing up CTV and digital does not grow reach. Increasing the allocation of CTV and digital to 70%, 80%, or even 90% actually causes reach to drop. Given that reach is the foundation of media effectiveness, this means lower brand impact and a reduction in potential sales effect.”
Not surprisingly, according to Nielsen, what does boost the reach of any TV-and-digital plan is AM/FM radio. Examining seven monthly ad campaigns aimed at adults 25-54, with budgets ranging from $500,000 to $10 million, the lift in reach with a 20% allocation to radio ranges from 17% to 100%, with increases from 36% to 55% for medium-sized campaigns.
Nielsen's deeper dive into which media provide the most incremental reach shows that adding AM/FM radio adds more to a media plan than digital or connected TV. For a $15 million campaign with 62% of spend going to broadcast and cable TV, 8% to CTV, and 20% each to AM/FM and digital, AM/FM lifts incremental reach by 14.3%, vs. digital's 5.6% and CTV's 1.6%.
While the assumption may be that CTV reaches the most persons who are light viewers of live and time-shifted TV – defined as those watching for less than two hours daily or none at all – Nielsen's analysis of the same media plan as above with a $15 million budget shows that again, AM/FM radio generates the most incremental reach among these light TV viewers, who account for 40% of Americans age 18-49. AM/FM boosts reach of this segment by 28.9%, vs. digital's 11.7% and CTV's 3.3%.
The secret to AM/FM's success is, simply, its larger ratings compared to TV – 66% higher among persons 18-34 and +12% among 18-49s, while steadily gaining on TV in the 25-54 demo.
“The relationship between TV and AM/FM radio average audiences has shifted dramatically in the last five years,” Bouvard notes. “In 2018, TV’s average audience was significantly greater than AM/FM radio across all major buying and selling demographics. Today it is a different story. When you put AM/FM radio in the plan, you introduce a medium with larger reach and more GRPs than TV.”
It stands to reason, then, that AM/FM radio's major advantage in such media plans is delivering younger consumers. Nielsen shows this is the case when shifting 20% of the ad budget to AM/FM, where on average, the medium generates a 45% reach increase among persons 18-24, and 42%, 35%, and 29% lifts among 25-34s, 35-44s, and 45-54s, respectively. “[While] plans with a heavy concentration of linear TV skew old, the younger the demographic, the greater the reach lift generated by AM/FM radio,” Bouvard says.
The main takeaway from Nielsen's research? “Assuming CTV [is the solution] for all of your linear TV woes is a fool’s errand,” says Bouvard. “CTV adds surprisingly small amounts of incremental reach to the base linear TV buy, especially among light TV viewers, [while] digital adds a modest amount of reach. Shift 20% of the media plan to AM/FM radio, and watch campaign reach soar.”