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Spotify vs. Radio

March 31, 2022

Digital pure plays have been coming after radio’s lunch money for quite some time. Recently it appeared that Spotify has upped the ante. Under their “Spotify Advertising” banner, they posted the following: “Podcasts vs. radio: What’s the difference for advertisers?”

As you might suspect, the point of the “article” is to show why advertising on podcasts is better than advertising on radio. They start off the article talking about radio personalities and how they provide value, but they are not available on demand. In other words, that hilarious morning show bit at 7:15AM may not be heard because, well, something came up and, quoting here, “…and before you know it, the show’s over. Gotta wait till tomorrow.”

The logic follows that you never have to wait for a podcast. It is always there for you.

However, the key point is – what does this mean for advertisers? According to Spotify, a podcast listener will always hear an ad because they download and listen in their own time. (This assumes every podcast listener who downloads a show actually listens to it. But I digress…)

Spotify also presents multiple interactive options that mimic the interactivity of radio. These, the logic assumes, make podcasts just like radio.

This is all fine. Podcasts are purely about personality and content. They are all talk all the time. If that talk is particularly engaging (see: Rogan, Joe), then they are wildly successful.

Spotify does admit that “Even though the number of people that tune into radio still outpaces podcast listeners, that may soon change…” The word “may” is doing a lot of heavy lifting here. I won’t get into the details, but we know from various studies that radio listening does not merely “outpace” podcast listening. Radio listening dominates.

Still, this is all fine. Spotify is selling a service it has invested heavily in. There’s nothing wrong with that.

Then we get to the part that frosted our mug. As The Ratings Experts, we take the measurement of radio very seriously. We understand the current Nielsen is not perfect but it does still provide us with valuable and usable data. Here’s Spotify’s take on how radio is measured:

Let’s talk about broadcast vs. podcast advertising. In terrestrial radio, the tuned-in audience is a bit of a mystery. For analytics, radio stations provide advertisers with a general estimate of their audience based on blanket demographics and location information. Radio measurement providers collect this data from surveys—but it’s hard to know how accurate the responses are.

Spotify is clearly implying that all radio ratings are based on “surveys.” While that is technically accurate – every book is a survey – the supposed truth is that radio has no idea who is listening. The implication is that radio is pulling a fast one on advertisers.

Spotify continues:

This is why radio ads are sometimes generic and one-dimensional: It’s hard to target a particular audience when you have no idea who you’re reaching.

We could counter here by pointing out that an advertiser – say McDonald’s – that is trying to sell a breakfast option – say the Egg McMuffin – would probably want their message to be heard at a meal-appropriate time – say at freaking breakfast time! Can a podcast guarantee that?

Here’s our take. Smart advertisers use a combination of radio and digital. Both platforms have their advantages and disadvantages.

I have no problem with Spotify touting the advantages of their podcasting product. Radio sellers do the same for their stations. But there is no need to imply that radio is playing tricks while Spotify is the white knight for advertisers.

Spotify certainly can come after radio for many things – too many commercials, canned personalities, restricted playlists, etc. Instead, they chose to paint our industry as liars.

If you want to read Spotify’s propaganda: https://ads.spotify.com/en-US/news-and-insights/podcast-advertising-vs-radio-advertising/

And if you’d like to talk about how we help our clients position themselves amongst their competitors, radio and otherwise, reach out to us here.

-Steve Allan, Programming Research Consultant