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What We Know vs. What You Think

June 30, 2016

Westwood One put together an 18 page presentation that was designed to help the radio industry understand the relationship between the perceived and actual audience size of AM/FM radio and streaming services. On page 17 of the presentation, the conclusion page, it states that “The radio industry needs to do a better job of telling our story.”

iHeartMedia seems to be focused on being at the forefront of telling radio’s story, recently taking out a full page ad in the Cannes issue of Advertising Age that says “Radio Is Bigger than TV.” The ad shows radio’s considerably stronger reach versus television, with radio attracting 93% of Adults 18+ to television’s 86% based on a comparable metrics report from Q4 2015.

The goal of the “Radio Is Bigger than TV” ad is to help lead a larger industry effort for the advertising revenue rise to a level comparable to radio consumption. While the reality is that radio is a media buy that is more efficient in reaching Adults 18+, the perception is that television is the more effective advertising medium.

iHeartMedia with that ad is hoping to begin to change the perception and bring consumers into today’s current reality, radio is indeed bigger than TV. According to Thom Callahan, President of the Southern California Broadcasters Association, the strategy of promoting the medium’s strength is a sound one and forward thinking, “What iHeart is doing is what the entire industry should be doing, putting it on the big board table and saying, ‘Let’s have a national conversation about radio vs TV.’” According to Callahan, for every dollar that is spent on radio in Los Angeles, $9 are spent on TV, despite television’s declining audience.

Why is there such a disparity in spending between mediums? The strength of the perception of television and the weakness of articulating the real strengths of Radio. In an Inside Radio article titled “Radio’s Challenge: Communicate Its Strengths,” Horizon Media’s SVP of Research Brad Adgate says “The industry has to work a little bit harder in letting advertisers and buyers know just how big radio really is.”

According to the Inside Radio article titled “Ad Sends ‘Radio Is Bigger than TV’ Message Right To Buyers,” the number one reach medium message has found its way into research materials distributed by local broadcasting associations and station sales kits. It’s also become a top talking point among radio CEOs at media conferences and investor calls. It is clear that the radio industry is attempting to make strides to show exactly how big the medium of radio is.

According to eMarketer, the radio industry will draw 14.12 billion dollars of advertising revenue in 2017 and that figure is projected to grow to 14.15 billion dollars in 2017.

Radio should continue to effectively tell its story to prospective clients, advertisers, media buyers, and anyone who will listen. If you need help with showing the power of radio, use what we know to change what they think and contact Research Director, Inc. today.

-L.D. Williams Jr, Research Specialist