Faced with tighter ad budgets and diminishing returns from digital spending, some advertisers are taking a fresh look at traditional media like radio. It comes as broadcasters have not only found ways to demonstrate how digital and on-air media can work in tandem, but also as there are improved capabilities to show the return on investment that a radio campaign can deliver.
“Marketers are looking to diversify risk, and going back to more traditional channels like radio and direct mail allows that to happen,” said David Coleman, President of the ad agency Ocean Media. He told Digiday that a softer advertising market can lead to reduced pricing for traditional media, and that can be enough to lure clients back in. “Advertisers are looking for other opportunities to reach their customers to drive sales. That’s going to ultimately end up pushing dollars into lots and lots of different channels,” Coleman said.
It is not just radio that is benefiting. Digiday reports ad buyers are also shifting more dollars into out of home and direct mail campaigns as marketers are discovering that while more of digital is measurable, it is not the “silver bullet” that many had hoped.
Julie Levine, Senior VP of Strategy And Planning at ad agency Barkley, told Digiday that although ad budgets are not growing to bring more traditional back on the media plan, she said that some client budgets are being divided into smaller pieces.
The radio industry still has its work cut out for it as not all advertisers have gotten the message. The CMO Survey released in March found that CMOs predicted that their traditional media ad budgets would be cut 2.6% in the next 12 months. That was the worst outlook since the pandemic’s early months in 2020. “After traditional advertisement spend hit an all-time high one year ago, it once again reverts to a decade-long trend of negative growth,” the CMO Survey says.
The biggest increase in traditional ad spending comes in the energy sector, which plans to spend an additional 7% of marketing budget on traditional advertising over the next 12 months, while medium-sized companies (with between $500-$999 million in sales revenues) expect a small increase of spend in this area – with growth of 0.6% predicted – while CMOs at smaller and larger companies plan to cut back.