Local advertisers will up their radio ad spend by 5.4% in 2022, according to a just-released forecast from Borrell Associates. That is the third highest growth rate among traditional media channels, trailing only local TV stations (+12.3%) and telemarketing (+8.7%). In fact, radio is expected to grow faster in 2022 than nine of the 17 media channels profiled in the new outlook.
“Radio did what we did not expect it to do,” Borrell CEO Gordon Borrell said during an online presentation of the new forecast Tuesday. “What we expected it to do was have the same trajectory that the Great Recession of 2008-2009 had on newspapers, where they went down and never came back up. Radio went down and came back up, and it looks to be not declining as much as pre-pandemic.”
Radio’s performance raised some eyebrows at Borrell, so much so that the firm devoted a section of its presentation to “what didn’t happen and why” to radio during the past two years.
Wanted: Marketing Experts
During the pandemic local businesses discovered the value of their own assets, Borrell explained. Social media and website development became the two biggest growth categories as merchants relied on them to let customers know they were open for business and about the new protocols they developed for placing and picking up orders. At the same time, businesses realized they needed help from marketing experts and turned to media companies that offer holistic marketing advice. Borrell’s 2021 survey of 2,811 local ad buyers found 85% who said it is especially important for sales reps to exhibit a high level of marketing expertise. “All these advertisers since the pandemic are saying, ‘Wow, we really need help with our own media, our social media pages, our websites. I wonder who can help us?’ Well, guess who.”
The portion of local ad buyers who said radio sales reps have substantial/exceptional marketing skills surged from 32% in 2016 to 41% in 2021, outdistancing all other local media channels. And in the increasingly important area of digital skills, radio tied with TV for first place in the minds of local ad buyers with 28% saying sales reps from each medium possess digital skills that are very to extremely savvy. Significantly, radio’s percentage nearly doubled from 15% who gave it this rating in 2016.
Rising Sales Army
“The surge of radio sellers with marketing and digital savvy is just amazing, and a big factor in this,” Borrell continued. “And the ranks of the sales reps and the rising army that they have is also part of the pressure.”In fact, radio now employs the second largest sales force in local media. With 12,040 ad sellers, according to the U.S. Bureau of Labor Statistics, radio accounts for one in four local media sellers. Only newspapers (with 13,890 account execs or 29% of the local ad salesforce) employs more. TV is third with 10,550 (22%), followed by magazines/directories (10,080, 21%) and cable TV in a distant fifth place (1,290, 3%).
And if BLS forecasts compiled by Borrell hold true, radio may have the largest sales army within four years. The BLS annual growth forecast through 2030 calls for first place newspapers to shed 1.4% of its sales force while radio adds 1.2% more sellers.
“If you follow the Bureau of Labor Statistics on growth of reps and shrinkage of reps, by 2026, radio is going to have the greatest pressure on the marketplace because they will have the largest single sales force,” said Borrell.
There is another important reason why radio has shown resilience coming out of the pandemic. It offers one of the lowest price points for advertisers among all media channels. According to Solomon Partners, as of January 2022, radio’s average cost per thousand impressions (CPM) is $6.75 or about a third the cost of non-prime broadcast TV ($20), and less than one fifth the cost of primetime broadcast TV ($36).
“If you have a medium that is really inexpensive, it’s easy to prove ROI on something like that,” said Borrell. “Those are the things that we think have come into play and why radio seems to be so resilient.”