Re-investing in Radio to Find TV Audiences

Be Real Management & Marketing Agency talks re-investing in radio

In the world of advertising, Procter & Gamble Co. (P&G) is a household name. The company, which is known for inventing soap operas on the radio, has recently upped its spending on radio advertising by 43% last year to $235 million, led by a significant increase in the local radio. This comes as the company tries to minimize price hikes and cut overall spending. P&G Chairman and CEO Jon Moeller have told P&G brand marketers to focus on how many people they reach and how often, rather than how much they spend. As the company pushes brands towards reaching up to 90% of their target audiences, Chief Brand Officer Marc Pritchard has focused on the role of the programmatic connected TV and digital media buying, particularly free ad-supported TV (FAST), in moving beyond linear TV.

Despite the plethora of options to deeply target consumers, P&G is diving back into radio in a big way. This comes as U.S. media nears a surprising milestone where 18- to 49-year-olds are spending more time listening to the radio than watching linear TV. In times of media inflation, radio appears to be working as the Hamburger Helper budget-stretcher of unduplicated reach for P&G. The cost-per-thousand (CPMs) to reach audiences via connected TV is steep, often as high as $35 to $65. YouTube video CPMs range from $20 to $25, and linear TV is in the $10 to $15 range. In contrast, radio can be bought in the $5-$6 CPM range.

P&G started experimenting with the broader use of radio in 2017, and spending grew as more P&G brands tried radio and liked the results. In 2018, P&G spent $70 million on radio, gradually increasing that spending even as the pandemic hit commuting and radio audiences hard in 2020. By 2021, P&G was the biggest radio spender in the U.S. Even before last year’s big jump, at least part of P&G’s accelerated local radio spending last year likely also resulted from the company’s efforts to spend more with Black-owned media.

Radio has become a meaningful part of P&G’s plans because it is a cost-effective way to reach audiences beyond linear TV. Radio audiences have rebounded from the pandemic and have been far more stable than linear TV audiences, which have declined at an accelerating pace due to cord-cutting in recent years.

Radio’s appeal isn’t just that its audience has held up relatively well, but also that it’s substantially different from that of linear TV. Nielsen data show that radio is much stronger than linear TV with younger (18-34) and Hispanic audiences in particular.

A study by Cumulus using Nielsen and Media Monitors radio and TV spot data plus Nielsen audience measurement and media planning tools found that radio increased reach beyond linear TV by an average of 44% for P&G brands in the 18-49 demos in May 2022. Olay Body Wash increased reach from 43% to 71% by adding radio to linear, Zevo from 43% to 72%, and Metamucil from 32% to 53%.

In conclusion, P&G’s return to radio is proof that radio is still an effective and efficient way to reach audiences beyond linear TV. Programmatic connected TV and digital media buying are also valuable for other options, radio can offer a cost-effective alternative with unduplicated reach. By leveraging radio, P&G was able to reach new audiences that linear TV no longer reaches, thereby allowing them to maximize their advertising spend. As more brands start to realize the untapped potential of radio, we may see a resurgence of the medium.

Be Real Management and Marketing offers REAL People, REAL Dedication, and REAL Results. If you are interested in learning more about our work, please call us at 1-800-470-3758 or fill out the form found on our contact us page.