Comparison Of Radio With Other Advertising Mediums
Broadcast TV Advertising + Radio
The past couple of decades have been tumultuous for broadcast television. Up until the mid-'80s, the big three networks (CBS, NBC, and ABC) ruled the television airwaves and, along with newspaper, they dominated advertising revenues, as well.
Then the cable industry began its expansion into neighborhoods and homes all across America. Since then, things haven't been the same. The technology that made it possible to deliver dozens of channels into America's television sets also created a programming vacuum. We all know how nature feels about a vacuum, and it wasn't long before fledgling networks began springing up to fill the void.
As programmers experimented and gained experience, new and better programming was developed, and new networks became more competitive. Still, local affiliates of the big three networks thought their dominance, while chipped, was safe. They hadn't seen anything yet.
Advantages Of Broadcast TV Advertising
Mass Appeal
In addition to the 98.9% penetration rate among U.S. households enjoyed by television in general, 83.0% of these homes are multi-set households. (Nielsen Media Research, 2009)
Reach Vehicle
TV reaches 92% of the population on a daily basis. (Television Bureau of Advertising, 2009)
Big Events
Programs such as the Super Bowl or popular series finales can reach a large mass of audience.
Visual Appeal
TV has the ability to capture attention through sight, sound and motion.
Water-Cooler Appeal
Broadcast has the ability to generate next-day conversation about nightly programming, especially popular programs.
Current Status of Broadcast TV/Radio Advertising Rivalry
Massive New Competition For Viewers
Twenty years later and the big three are still major players, but they are no longer the only ones.
If viewers want news, they also have Fox News, CNN, and MSNBC to select from. If they want sports, they have multiple ESPN networks to watch. If they want movies, they have premium and vintage movie channels. And if they want first-run prime-time serial dramas and comedies, they can find them on dozens of channels in addition to the big three.
High-tech services such as video-on-demand, internet TV, and cellular phone video programming all threaten to further fragment America's viewing habits in the future.
DVRs Allow Skipping Of Commercials
To further complicate matters, broadcast TV also is dealing with pricing and value questions created by digital video recorders (DVRs) because of the ability they provide to avoid commercials.
Expensive to Buy and Produce Commercials
Broadcast TV still remains expensive to buy, and television commercials remain expensive to produce. Agencies still like to buy broadcast TV for their clients due to the commissions they earn, but establishing effective reach and frequency is something only national advertisers and large local companies can afford to do.
Broadcast TV + Radio: Increased ROI With Same Budget
Buying targeted TV programs and augmenting that with Radio buys on complementary formats is a great way for advertisers to get the ego gratification from being on TV while still getting cost-efficient and effective reach and frequency.
Explain the realities of TV to your clients, and help their business be a survivor.
Disadvantages Of Broadcast TV Advertising
Fragmentation
Marketers distinguish between Broadcast TV and Cable TV because of the differences in the way they are bought. Broadcast TV is generally sold locally by one staff for one station. Cable TV is typically sold locally by one staff for all the advertising-supported cable channels. On the other hand, viewers do not differentiate between Broadcast TV and Cable TV channels. Time spent viewing Broadcast TV is being divided among Cable TV channels.
Diminished
Consumers' broadcast television time is being further diminished by Video On Demand (VOD), video games, Internet video downloads, and Internet browsing.
Commercial Avoidance
As many as 38% of all U.S. TV homes are now equipped with digital video recorders (DVRs). The commercial "zapping rate" when programs are seen on a delayed basis is 50-70%. (TV Dimensions, 2009)
Commercial Clutter
Clutter, particularly on ABC, CBS and NBC during primetime hours, has risen almost 60% over a 40-year period. In the early 1980s, 19% of TV content was devoted to commercials. By the late 2000s, it had climbed to 25%. (TV Dimensions, 2009)
Escalating Costs
According to NBC Universal, one :30 in the 2009 Super Bowl cost an estimated $3.0 million, up from $2.7 million for the 2008 championship game. Apart from one-time programs or large special events like the Super Bowl, one average :30 can cost double or triple the amount of one :30 in Radio.
Production Costs
According to the American Association of Advertising Agencies, production costs for a network TV commercial averaged over $400,000. Producing quality commercials significantly impacts ad budgets.
At-home Medium
TV is primarily an at-home medium.
Lack of Recency
According to TV Dimensions 2009, peak viewing hours occur in the evening from 8-10 PM, when consumers are less likely to be making purchases.
Seasonal
TV usage is greatly affected by vacation and weather cycles and the effects these have on viewer interest and availability. Usage is highest in the colder winter months and lowest during the summer months. (TV Dimensions, 2009)