The State of AM/FM Radio: What Advertisers Need to Know
If you’re a marketer looking to advertise in audio, you’re in luck. There are plenty of options for you to choose from, especially if you want to align with the passion point of music or the burgeoning area of podcasting. But there also seems to be equal confusion around how to choose the right platform for your brand and message. This is, in fact, one of the most common questions we get from our advertisers.
While we’d all like to think that music is music, and audio is audio, it’s just not that simple when it comes to buying media. Not only do you need to consider how your target audience listens to audio, you also need to be thinking about where they listen most.
True, America’s oldest electronic mass medium--AM/FM radio--is still alive, kicking and serving throngs of listeners every day, but it’s also being disrupted by today’s growing digital media landscape. Radio has prospered for so many decades because it’s free, easy-to-use and there are tons of them around. In fact, it used to be the only way to enjoy music without having to invest in a record collection or to hear news, sports and traffic information on-the-go.
But AM/FM now faces serious competition from personalized, digital alternatives. Waze and Google Maps, for example, offer real-time traffic updates on individual routes; sports fans can choose the play-by-play team of their choice online, even if it’s out-of-market; and streaming apps like Pandora serve up music that’s personalized for each listener.
AM/FM Radio’s Main Setback: Car Troubles
First and foremost, there’s been a noticeable decrease in the number of Americans choosing to drive. Just 69% of 19-year-olds earned a driver’s license in 2014, compared to 87% in 1983. No longer is jumping in the car and hitting the open road synonymous with American freedom. Now, younger generations see car ownership as more of a burden than anything, citing the high cost of acquiring and operating a car as the top reason for not getting licensed.
Additionally, ride and vehicle sharing--as well as autonomous driving--are rapidly being seen as preferable alternatives to traditional car ownership. Both Uber and Lyft are barely seven years old, yet the two services booked 97 million rides in December 2016 alone. Even vehicle sharing, most notably by the Avis-owned company, ZipCar, has gained significant traction in the marketplace for users who have opted not to buy a car of their own.
And autonomous driving, once considered a far-off dream relegated to sci-fi movies, is actually becoming a reality. Uber is currently testing driverless cars for hire in Pittsburgh, and Lyft expects to launch a fleet of self-driving cars using technology from its part-owner, General Motors. Tesla is saying a fully autonomous car, where a driver could literally sleep during the ride, will be ready in 2019.
In-Car AM/FM Listening Already Slipping
Satellite radio is installed in about a third of the cars in the U.S. and comes with 75% of new cars. SiriusXM’s more than 32 million paying subscribers are voracious users of the service, accounting for 70% of their daily in-car audio time.
Streaming services like Pandora can also be easily accessed in connected cars. On our platform, we’ve found that nearly 10 million Pandora active listeners access the service through a built-in infotainment system in their dashboards--and this doesn’t include the millions more who listen in their cars via a wired smartphone connection like AUX or USB.
New stats from Edison Research shows that drivers of the newest car models, which are more likely to include advanced media options, are listening to 40% less AM/FM radio than drivers of older cars. This confirms that drivers who have access to AM/FM alternatives indeed use them, thus loosening radio’s firm grip on in-car listening with each new model sold.
Grab Them by the Ears
Brands that currently rely on reaching their customers this way will need to rethink their approach. Developing a strategy to capture attention across the number of alternative listening sources--including those present in the car--will not only provide greater reach, but also more effective targeting options, a better user experience and a higher level of accountability overall.
Are You Ready To Learn More?
And, good news! If you didn’t get a chance to check out the inaugural edition of the Definitive Guide to Audio, there’s still time. Click the image below to download your copy today, and walk away with immediate knowledge about how audio advertising that can be applied to your next campaign.