That statement from Entercom CEO David Field may rub some people the wrong way, but that’s one of the reasons he believes radio doesn’t get a higher share of ad spending. Radio has been stuck at 7% of the total advertising pie for many years. Field was detailing the new opportunity he says Entercom and the radio industry have with the Entercom-CBS merger. He believes the much larger company will give Entercom the scale it needs to compete with other media.
Field believes with a larger Entercom there will be two companies with a major voice, the other being iHeartMedia, which Field has always been impressed with under CEO Bob Pittman.
Field said there is an irrational disconnect between radio’s actual share of ad spending and its significantly stronger value proposition. “Radio has long been under-valued and under-appreciated by the advertising community. It is extraordinary that this immensely effective medium that is number one in reach, number one in daytime usage, the least disrupted of any traditional medium, and arguably number one in return on investment, receives only 7% of ad spending.”
He then asked the question, Why doesn’t radio get a higher share of ad spending? And his answer: “As an incumbent media competing with shinier and sexier alternatives, radio has suffered from inaccurate perceptions that fail to grasp its vibrancy and effectiveness. It has also suffered from a woeful lack of industry advocacy that enabled false perceptions to permeate the thinking of advertising leaders. In short, radio has been punching below its weight class. That has started to change with iHeart and its advocacy for radio to compete more directly with other media. And they are starting to move the needle with their impressive top-line growth in recent quarters. Entercom is now that second major voice.”
Field said the potential is clearly there for radio to be rediscovered by frustrated advertisers looking for ways improve the efficiency and effectiveness of their buys by shifting the media mix a bit more toward radio. He says the Entercom/CBS merger creates a catalyst for that to happen.