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Local advertisers stick by radio while exploring new digital options

Local Businesses Remain Loyal to Radio While Building Digital

Despite a growing menu of digital advertising choices, local advertisers still trust radio to help them connect with consumers and generate sales. Even as radio retains a strong share of local ad spending, the stark reality is small businesses are directing more money to digital platforms, including digital audio. This trend serves as a strong reminder to radio sellers and the industry that creating broadcast and digital solutions will help grow revenue and market share. 

About 40% of local marketers use AM/FM radio, spending an average $44,722 per year on radio spots, according to media consultancy Borrell Associates’ new 2019 Local Advertiser Survey. That spending total is third behind broadcast TV and cable, although a much smaller percentage of local businesses utilize those TV platforms. 

Social media marketing ranked as the most used ad channel, with 62% of advertisers utilizing paid social media. Events and sponsorships ranked second, with 51% usage. Radio ranked sixth, with about one-quarter of small businesses reporting they use radio for advertising. 

The average small business will spend $116,200 on advertising this year, up 1.6% from last year, Borrell reported. While that’s a modest gain, any increase in spending is good for local media companies. Local companies used an average of 3.4 traditional media platforms and 2.8 types of digital advertising. 

Digital channels are enjoying the most rapid growth. Thanks to digital, local marketers have never had so many tools at their disposal and, increasingly, they are directing more allocating more dollars for  digital. In fact, nine out of 10 digital ad categories were up year-over-year. In an indication of future spending, 61% of small businesses said they plan to increase spending on digital audio this year, second only to digital video ads. 

While the optimal ad plan for a local marketer varies by business and industry, Borrell notes than 89% of advertisers deploy a mix of channels. Radio stations can offer small businesses a potent combination of over-the-air and digital advertising, including mobile, social, podcasts and digital audio. According to Borrell, this year, about 6% of small businesses plan to buy mobile, digital audio, and mobile-in app ads or push notifications. Radio can deliver on all of these. 

To capture a larger share, radio needs to pitch its offerings to businesses. It seems obvious, but it isn’t happening as often as it should. While about one-third of those surveyed said they were presented with radio on-air and digital opportunities and bought both, 29% of marketers said their radio seller didn’t offer them any digital products and 11% couldn’t remember.  

While no one in local media has a crystal ball, it is undeniable that consumers’ media consumption continues to shift to digital and mobile. While local businesses value radio for its time-tested abilities to bring out customers and build business, they’re increasingly willing to try out other formats. To remain relevant and vibrant, radio stations must offer small businesses the most innovative broadcast and digital ad opportunities in their markets. 

Written by Paul Altman