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It’s Time to Take a Long, Hard Listen to the Radio

March 27, 2015

According to a report published by Business Insider, ad tech specialists will have more opportunities to gain a larger foothold in the realm of advertising spending as a result of less human mediated manual sales and more real real-time bidding. These are poised to dominate the advertising spending space going forward.

Real-Time Bidding (or RTB) is defined by Scott Spencer, Director of Product Management for Ad Exchange, as “the act of buying digital inventory from multiple publishers on an impression-by-impression basis, typically involving an auction pricing mechanism.”

The initial report articulates a few key takeaways:

  1. RTB ad spending is growing at a rapid rate. RTB will account for 33% of U.S. digital ad sales or $18.2 billion by the year 2018.
  2. Mobile and video ads are poised to be key drivers of this expected growth with mobile projected to account for $6.8 billion and video projected to account for $3.9 billion.
  3. The demand for programmatic ads currently exceeds the supply. The cost for social ads are up 64% from January to April 2014 from the same time period a year prior.

Soaring digital ad spending, key growth in the mobile and video space, and a rising demand for digital ads raise a critical question: What does this mean to radio?

There is still exponential opportunity to be maximized with the use of advertising on the radio. Radio is still the most widely used mass communication channel in the world with about 13,000 radio stations (8,800 FM stations and 5,000 AM stations) in the United States, reaching over 90% of the 12+ population each week.

In addition to radio’s classic reach, radio is in the unique position to act as a complement to the burgeoning mobile advertising space. The growth of smartphone use makes it easier and more plausible for consumers to access radio stations using their device.

The rise of platforms like Vine, Snapchat, and Cinemagram platforms lend themselves to short bursts of content in the :10, :15, and :30-second variety, which positions radio to serve as a complement to digital advertising campaigns. The cost of radio creative is a fraction of television and digital creative, and as a result, it is easier to narrow or personalize marketing messages in a way that digital advertising cannot.

Radio can offer an affordable and effective complement or viable alternative to a video campaign for a brand. Please contact Research Director, Inc. to help you prove the value of radio to potential advertisers.

The following websites contributed to this article:
http://www.businessinsider.com/the-programmatic-and-rtb-ad-report-2014-8
http://adage.com/article/special-report-music-and-marketing/marketers-reevaluate-radio/244428
http://adexchanger.com/online-advertising/real-time-bidding

-Lauchin D. Williams Jr, Research Specialist

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