Why Radio Still Reigns: The Untapped Power of Radio Advertising in 2023

Radio was the first form of advertising across the globe, outside of printing. America grabbed hold of this invention in 1900 and never looked back. To date, radio is still the best medium of advertising to reach the American masses.

Even though radio entered a few elite homes in the early 1900s, it was 1934 before the majority of Americans had a radio in their home. Today, it’s associated predominantly with automobiles. We can’t watch TV while we drive, so we listen to the latest on air or via streaming services. 

Ultimately, it’s still America’s preferred form of entertainment and consequently, advertising.

In the first half of the twentieth century, radio broadcasting was the cheapest form of entertainment and readily available. Movies, music and plays required tickets for every production and transportation to get there. Throughout the Great Depression, it was a lifeline for many Americans. As a result, its popularity grew rapidly in the late 1920s and early 1930s, and by 1934, 60 percent of the nation's households had radios.

Radio Advertising’s Uniqueness

This medium afforded Americans the opportunity to use visualization as a form of entertainment. Initially, ads included live actors who would provide voiceovers of not just the product message, but fun or humorous sounds to add to the advertisement. Such additions often made the listener laugh and helped them to remember the brand message fondly.

Public radio has retained that original form of live brand messages in its programming. Delivered by the program host, listeners associate a familiar voice with an increased level of trust in the brand itself. It’s referred to as the Halo Effect in public media. Interestingly, in this way, original radio advertising lives on and continues to prosper.

TV Versus Radio Revenue

While TV may yield slightly more advertising revenue, they don’t have as many viewers as radio has listeners. Moreover, radio advertising is more cost-effective. In other words, radio advertising is generally less expensive than TV ads and advertisers garner more of the population at once when utilizing radio. 

Getting the most bang for your buck matters when your funds are limited, and your job depends on it. Hence, marketers want to tune in to how best to allocate their marketing budget. You know, the more people you can reach, spanning as many demographics as possible, the further your marketing dollars will go.

Americans Prefer Radio

In the United States, radio has a weekly reach of approximately 82 percent among adults 18 and over. There are over 15,445 radio stations in the U.S. In addition, online radio is gaining momentum. On a monthly basis, an estimated 974 minutes are spent listening to online radio. This is additional radio time, often outside of automobile listening.

Currently, a mere 13 percent of Americans discover new products or brands via traditional TV advertising. Whereas that number is higher for radio and podcasts, reach may be the greater comparable.
Radio reaches three consumers 1X rather than 1 consumer 3X. As only one in three listeners may need or desire that product, the more listeners that hear your advertisement, the more likely someone is to buy. 

Additionally, ads are most effective when they remind people of brands they know, at the time they happen to need a product or service. Because the majority of radio is listened to in the car, potential customers are more likely to hear your brand message when they are out running errands. Messaging plus immediacy equals sales success.

Radio Revenue Continues to Increase

Radio advertising is a multi-billion-dollar industry. In 2022, more than 90 percent of radio station ad revenue in the United States was generated over-the-air (OTA). The same year, U.S. radio stations generated roughly $16.1 billion U.S. dollars in OTA revenues. This was up from $10.9 billion the previous year. Meanwhile, online radio ad revenue reached approximately $1.8 billion that year. 

Second only to iHeart radio, National Public Radio is also reporting steady numbers, with a revenue of $309 million U.S. dollars. American radio stations generated total revenue of over $12 billion U.S. dollars in 2022, of which 1.7 million dollars was generated through online radio streaming. In addition to the massive national stations and broadcasts, local public radio stations also appear to be thriving.

Generations Listen Differently

It is important to note that Boomers are seven times more likely than Gen Z to discover new products and brands via traditional TV advertising. For Gen X, Millennials and Gen Z, your best mode for brand messaging is audio. Radio and podcasts combined take precedence for entertainment with these demographics.

With this stated, if you’re seeking an audience encompassing numerous generations, then radio is still your best choice for advertising dollars.

The market for online audio in the United States is growing stronger, with the average user spending well over 16 hours per week listening to these services. Over two-thirds of Americans report that they listen to online radio on a monthly basis, while 62 percent consider themselves at least weekly users. 

The impressive reach and greater usage time provide companies with increased advertising possibilities. If you’ve been hesitant to lean into radio advertising, now is an ideal opportunity.

It's Time for Radio Advertising

According to an August 2023 MARU/ Matchbox National Study, 27% of respondents say they’ll watch less linear TV this fall due to increased re-runs of old content. This is, at least in part, due to the current writers’ strike. Among those who said they’d watch less TV, 68% said they intend to replace TV viewing time with listening to podcasts, music, and AM/FM radio. 

This transitional period may yield a long-term, positive impact on radio and podcast dedication. Time will tell. What we do know is that since the introduction of television, the opportunity for high impact with radio advertising has never been greater. 

As the American public turns to radio in record numbers, advertising in this medium will take precedence. Lock in your time slot now. And if you want to tap into that brand trust via the Halo Effect, reach out to us today. Public radio is a tried-and-true format that Americans trust. We are happy to pass that privilege on to our sponsors. Leave your contact info below and we’ll reach out to you ASAP.