Go Get Your Market Share Back!


(By Spike Santee) The advertising market in the U.S. is growing faster this year than previously anticipated, according to a new report from IPG Mediabrand’s Magna unit. Advertising spend jumped 5.8% in second quarter after a 5.6% increase in the first quarter. 

Advertising spend is on a pace to reach a new all-time high for the full year in 2018! Magna now projects the U.S. ad market will top $200 billion for the first time ever, ending the year at about $207 billion, a 6.9% expansion over 2017. Magna has also raised their forecast for 2019 based on expectations for strong continued economic growth.

The Magna Report indicates the advertising pie in America is growing faster than expected while radio’s slice of the advertising pie continues to shrink, falling 4.7% this year and expected to lose another 4.7% next year. 

That is a very bleak outlook for the medium that is enjoying a reemergence as a relevant advertising medium with overwhelming evidence that radio is the REACH leader, the Return on Investment leader and the Cost Per Thousand leader. 

Digital, video, and social media advertising are the growth categories, growing 18.2%, 27.9% and 37% respectively. 

In retrospect, 15 years ago, there was no digital/social share of the advertising pie. Today, they dominate in share and growth rate. How did this happen? Is the digital/social advertising medium that much better? Or did traditional media just get outsold? 

Terrestrial radio, AM and FM radio, reaches over 90% of the American population every week. A number that has remained unchanged over the past 10 years. Time spent listening in the car remains unchanged. 

What has changed is the abundance of evidence to support radio’s impressive story as the most affordable, most relevant, most effective medium for businesses of all sizes, especially at the local level. 

You don’t have to look far to find remarkable stories of radio advertising’s direct contribution to the success of the advertiser. Take Home Depot versus Lowe’s, the two leaders in the hotly contested home improvement category. Home Depot is radio’s largest advertiser, buying forty to fifty thousand radio commercials in a single week. Sales in the second quarter were up 5.3% at Lowe’s while sales over at Home Depot were up 8%. Home Depot dominates Lowe’s, with sales of nearly $40 billion more a year. Lowe’s recently announced that they were slashing inventory and closing stores to better compete with Home Depot. 

What initially appeared to be a foolproof way to track advertising effectiveness has turned into a cesspool of fake users, Internet trolls, hate speech, fake news, and vicious personal attacks. The advertiser has very little control over how and where their advertising is displayed. They don’t know if they are reaching real people or if software robots pretending to be potential customers are simply driving up the metrics causing the advertiser to pay more and get less, maybe even nothing.

Radio metrics come from a third party, the Nielsen company. Digital and social metrics often come from the provider themselves with little or no accountability. Facebook marketing representatives recently admitted that reach estimates for potential advertisers are not based on local demographics. 

Even more disturbing is the rapid disenchantment of social media users. According to the latest research from the Pew Research Center, in the past year 42% of Facebook users 18+ have “taken a break” from checking their Facebook for several weeks or more. Fifty-four percent have adjusted their privacy setting and 26% have deleted the Facebook app from their cellphone altogether. 

You don’t see listener disenchantment with AM and FM radio listening. While television and print are declining in audience reach, AM and FM radio still reaches nine out of 10 people in your community. Those listeners still spend over two hours a day listening to AM and FM radio. 

Holiday sales are forecast to be up this year by more than 5%. With all of the overwhelming evidence that AM and FM radio still remains the best reach and frequency for the money, now is the time to dust off your old presentation materials, polish up your sales talk, and make the personal commitment that you are going to call on more people more often with your proud story of how you can help your customer bring back their old customers, increase their repeat business, and help them find new customers for the future. 

Talk to you soon. 

Spike Santee is the author of The Four Keys to Advertising Success and the president of SpikeSantee.com. Contact Spike at (785) 230-5350.


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