Adding AM/FM radio to an advertising buy on Pandora or Spotify can generate a major increase in reach, according to an analysis of Edison Research's recently released Q1 2021 edition of its “Share of Ear” study, as reported in this week's Westwood One “Everyone's Listening” blog. The analysis, which focuses on ad-supported Spotify, Pandora and SiriusXM – thus excluding subscription-based Spotify and Pandora and commercial-free music channels on SiriusXM – shows that of the combined AM/FM radio and Pandora audience in a typical day, 85% listens to AM/FM and never Pandora, while for the combined AM/FM and Spotify audience, that number's 83%.
“Some advertisers make a buy on Spotify and Pandora and declare, 'The audio box is checked.' Not so fast,” Westwood One Insights Manager Brittany Faison says. “More people listen to AM/FM radio and not Pandora, Spotify, or SiriusXM.”
Over half of Pandora's or Spotify's audience also listens to AM-FM radio, meaning an ad buy on AM/FM delivers half of either service's ad-supported audience for no extra cost. In addition, three-fourths of AM/FM and SiriusXM's combined audience listens to the former and not the latter, while half of the satcaster's ad-supported audience listens to AM/FM.
According to Nielsen Media Impact figures shown in the blog, increasing an ad buy of adults 18-49 on Pandora and Spotify results in little growth in reach, while the same investment levels on AM/FM generates triple the reach. “Since Pandora and Spotify audiences are so small, it is very difficult to build reach on their platforms,” Faison says. “Even as investment is increased, reach growth flatlines on Pandora and Spotify. Meanwhile, as AM/FM radio investment is increased, reach grows and grows.”
Key to this analysis is Edison's finding that 71% of time spent listening to ad-supported pure-play streaming services such as Pandora and Spotify takes place at home, while 61% of AM/FM listening occurs away from home, in the car and at work, meaning the medium reaches consumers on the path to purchase. Also working in AM/FM radio's favor is a MARU/Matchbox study cited in the blog showing that ads on Pandora and Spotify are only audible two-thirds of the time compared to AM/FM.
Additional research from Edison strengthens the case for AM/FM. It shows its 39% of audio time spent on smart speakers compared to ad-supported Pandora (27%), SiriusXM (9%) or Spotify (8%), and Q1 2021 dominance in share of ad-supported audio among persons 25-54 at 70%, vs. Pandora, SiriusXM and Spotify's 8%, 4% and 3% respectively. That dominance approaches 90% in-car compared to ad-supported SiriusXM (6%), Pandora (2%) and Spotify (1%).