Digital Radio Trends

August 2, 2017 by  Top Drawer Media
Hand tuning radio, tuning radio, radio

The Evolution of Radio

When they said that video killed the radio star nearly four decades ago, they hadn’t accounted for radio’s potential to evolve with the needs of the modern consumer. And by evolve, what we really mean to say is metamorphose – into a hyper-relevant medium for consumers, brands and marketers.

It is a common misconception that AM/FM listenership has declined when in fact it has remained stable, with internet radio usage on the rise. Compared to even one year ago, we’re spending more time listening to music – an average of 32 hours per week (up from 24 last year) and up to 44 hours for millenials1. 93 percent of Canadians are listening to music, an increase of four percent from just one year ago1. We’re also listening in more places than ever before, at home, in transit and at work.

Graph of Radio Trends

Source: 1 Nielsen Music 360 Canada

Current and Emerging Radio Trends

The digitization of the medium has created zero boundaries in terms of how individuals are consuming radio.

As a result of emerging tech trends, as few as seven different device categories are now delivering radio to consumers. More than ever before, consumers are using their connected devices to play music, a trend that is forecasted to grow significantly.

At home, smart TVs equipped with radio and streaming apps are being used to play radio. As much as 68% of smart home device usage, like Echo and Alexa, is for radio. On the road, while the connected car shows promise, traditional radio and music on-demand are still the prevailing method of listening. In transit and on foot, wearables like connected watches are connecting users more and more. And that’s not to mention mobile devices, like smartphones and tablets, with so many different options for streaming on the go.

Content-wise, music has become more readily available through streaming (e.g., TuneIn, iHeart Radio, Pandora) and on-demand services (e.g., Spotify). As a newer form of media, podcasts have gained soaring popularity with an audience that continues to grow each year (20 percent of Americans and 15 percent of Canadians listen, skewing toward the male demographic).

Graph of Radio trends

Source: Radio on the Move

Forecasting the Future of Radio Marketing

One of the unique strengths of radio for marketing purposes, over other mediums, is its “hear and see” capabilities. With advances in technology, the listening medium of radio can now effectively be paired with visuals – companion banners on the screens of listening devices, for example. The opportunities to connect users to websites to Learn More and Shop Now have dramatically increased.

Phone with headphones and coffee on wood

Source: Getty Images

Because advertisers have the ability to control the frequency of ads to each unique listener, and have access to metrics via tracking, their presence on streaming platforms is forecasted to grow significantly in the future. It will also become available to smaller advertisers eventually, once it becomes self-served.

But when planning digital audio advertising, marketers need to consider that listeners could be in their car, at work or at home. Unlike traditional advertising, where only a few channels are available and the message has to adapt to the medium, radio works closely with media. The shift here in digital audio is that – with the medium being so ubiquitous – advertisers have an opportunity to change the message to be channel-specific.

In terms of podcast advertising, the future looks promising. Listeners tend to welcome podcast advertisers because they expect the content to be sponsored – ads are received more as one-on-one connections. As more advertisers and marketers learn that their ads can be tracked, podcast advertisers will become more widespread. This, however, will also depend on Apple’s willingness to improve on and release their data reports (at the moment it is a challenge to get access to Apple reporting).

Another advantage of digital radio is its freedom from fraud. Because digital audio is programmatic, issues with fraudulent metrics have been a concern for the industry. Half-viewed banners and malware ad clicks cost advertisers money and muddy analytics. Digital radio, on the other hand, streams from a closed system (e.g., Spotify) and at present remains completely fraud free.

Radio presents a unique opportunity for new creative approaches, as well. Paul Shaver, Head of Nielsen Music Canada, highlights the sentimental value music plays in people’s lives, a relationship that brands can benefit from.

The medium of radio is anything but dead, and with consumers’ changing habits and patterns, along with continual new technology, reinvention is going to happen and at very short intervals throughout the coming years.

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