Advertising is used to deliver messages to the masses. Over the years, it has predominated in our culture. Television, radio, magazines, and newspapers have all adopted mass media. Advertising in the mass media represents a significant portion of the operating revenues of these outlets. Companies and businesses pay radio stations, television stations, newspapers, and magazines to distribute their ads via their platform. Without ads, the programs of these media would be very different.
How did it all start?
In August 1922, AT&T (American Telephone and Telegraph) created the first pay radio ad in New York, developed by WEAF. One of AT&T’s employees describes a concept first known as electronic toll collection in a book called “The WEAF Experiment.” This experience has been used to sponsor entire radio programs. The first sponsor was Queensboro Corporation of New York, and the advertising, according to AT&T, was for the sale of real estate. The advertisement began on August 28, 1922, and covered five programs that were broadcast for five days. The cost of the programs was $50, plus long distance access fees. It is believed that other radio stations may have sold advertising before the AT&T WEAF commercial trial.
In May 1920, an amateur broadcaster rented his radio station for $35 a week for programs that were broadcast twice a week. In March 1922, Remick’s Music Store in Seattle, Washington, purchased a big ad for the radio station KFC. This ad was purchased in exchange for the broadcast of their weekly program on the radio station. Alvin T. Fuller, an automobile dealer, purchased WGI time from Medford Hillside, Massachusetts, on April 4, 1922, in exchange for mentions of the automobile dealer during the programs.
In 1922, the BBC was established in the United Kingdom. Many radio manufacturers have joined forces and started to promote a new broadcasting medium. The government was concerned about the vital importance of broadcasting, and an investigation was launched. In 1926, John Reith, Director General of the BBC, testified before the Crawford Committee. He said that broadcasting should be treated as a public service and have clear standards now and in the future. The British government accepted the conclusions and created a public company, the BBC, in 1927. The Royal Charter has developed a governance structure to ensure that the broadcasting corporation has final standards that must be met.
In 1973, about eighteen years after the BBC’s creation, its first commercial competition was created. Local Independent Radio (ILR) has launched commercial radio. The Independent Broadcasting Authority (IBA) has started licensing radio stations. The stations were local and covered counties and cities in the United Kingdom. There was only one station in each region, except in London where there were two – LBC, which broadcast information and news, and Capital, which broadcast entertainment. The rest of the local stations across the country offered a range of programming, including pop music, religious programs, news, classical music, and chat rooms. All these stations were locally operated and owned. Since its inception, one of the essential characteristics of commercial radio has been proximity.
On October 8, 1973, British radio broadcast its first official advertisement. Advertising on Bird’s Eye frozen food was part of the advertising for the first commercial radio station in the United Kingdom. The London Broadcasting Company (LBC) was the name of the radio station. You can hear an audio clip HERE.
After listening to the ads that are broadcast at the end of the program, you will notice that little has changed over the years with respect to the advertising formats of radio stations.
Radio advertising throughout the 20th century
From the beginning of the 20th century, the amount of advertising began to increase considerably. Where this has occurred, efforts have been made to improve the effectiveness of advertising. As the radio station began to expand in the 1920s and 1930s, technological advances began to occur to change advertising.
Now, announcements that were only available in printed form could be heard. William M. O’Barr said that radio advertising frees up the way of advertising. In the past, only literate people could read print ads. After the invention of the radio, advertising could now be spoken, set to music and eye-catching jingles were created. At first, advertising agencies were not convinced, but very quickly, radio ads became the preferred medium and discovered that radio offered advertisers endless possibilities.
In 2014, a study by Edison Research found that 91% of Americans aged 12 and older listened to the radio every week. In 2015, research determined that online radio listening to the same age group increased from 27 percent to 53 percent over the previous five years. Among online listeners, 73 percent used smartphones, while the rest listened to online programs on desktops and laptops.
The growth of satellite radio and Internet radio
The radio industry, including terrestrial, satellite and Internet radio, is a large business. In 2013, the industry posted a net balance of more than $17 billion. All these types of radio stations continue to force innovation and growth in the industry, especially in terms of personalization and accessibility.
Unlike traditional radio, satellite radio derives its revenue from paid subscriptions. In exchange for subscriptions, users can choose the content they want to listen to almost anywhere. Traditional AM/FM radio signals cover a limited area. Satellite signals are available everywhere. Listeners can enjoy their favorite station wherever the satellite signal can reach. This means they can enjoy their favorite stations at home, in the car, and at the office. In 2014, Sirius XM Radio Inc. was valued at approximately $23 billion.
The Internet has changed the way listeners enjoy their favorite radio stations. Using a mobile device, tablet or computer, listeners can listen to live shows, podcasts, previously broadcast shows and an extensive library of their favorite music. Users can choose the order of the songs and programs they want to listen to. The online streaming service, Spotify, provides listeners with more than 30 million audio tracks. Its users can customize the music programming they want to listen to. They don’t need to depend on a DJ to play the music they like. Pandora and Spotify have more than 140 million listeners. Many of these users pay a subscription fee to eliminate ads and further personalize their listening experience.
The evolution of the landscape
Given many technological advances in our radio industry, are traditional roles such as promotion managers still necessary? Like other evolving industries, some roles are necessary; however, these roles may need to be adjusted.
Promotion managers, for example, promote radio stations to improve revenues and increase the audience. Although the Internet and satellite radio offer different content, these radio stations still need managers to promote business and audience. The tools, as well as the radio audience, have changed over the years, the results remain the same.
Many radio stations are now subscription-based, which means that promotion managers must sell the value of these services and costs to their listeners. Satellite radio and Internet radio have begun to change the general nature of radio stations; however, innovation to differentiate organizations and increase the station’s audience is continually evolving.
The way companies make large purchases, such as advertising campaigns and buildings, has changed over the years. Before the advent of the Internet, companies needed to talk to a salesperson to get answers to their questions. If a company wanted information about television and radio advertising, it would contact an account executive. There were no other options.
With the inception of Google, companies can search online and often prefer this method because they do not have to make a decision and make a purchase from a seller. Customers no longer need to engage with their account manager until a later stage in the overall purchasing cycle.
To help you understand the change, think about how you bought a car 20 years ago. You would drive to a car dealership and talk to a car dealer about the makes and models available for purchase. Now you can do a quick search on the Internet and find the exact make and model of the car you want to buy.
How the Internet is affecting radio advertisement
In the early 1920s, the ads began to pop up in radio shows. It was in the 1980s when we saw commercial ads on cable television. And 1990s was when it started to become accessible to everyone.
In this 21st century, the Internet is everything. No matter what you want to know, to eat, to visit, to watch, to experience, if you know how to access the Internet, you can get them all with literally just one click.
According to this report, today, the Internet is accessible to 57% of the global population and is only increasing.
The Internet offers you better entertainment
Let’s face the truth, on the Internet you can watch videos, listen to music and podcasts, you can browse through the galleries of images, you can find almost any information on any topic with just a few clicks and what’s really important is that the Internet is evolving.
What can you do any of them except listening to the audio on the radio?
Furthermore, since the 1920s there has been little to no changes in radio and the way to present their ads.
Advertising on the Internet is much easier than radio
If you want to advertise on any website then most you will have to do is send an email to the webmaster. Within a few days, you will receive all the details along with the fees.
But that’s not possible with a radio advertisement. You first need to contact the sales team of this media outlet. That sales team will then forward your request to the appropriate person who will then contact you and will try to understand your requirements. Then you will need to record the ad which you want to broadcast on their platform. You will have to send this audio ad for verification, and only if accepted, you will receive a quote.
What I’m trying to say is, advertising on the radio is not easy and is not meant for everyone, but that’s not the case with websites.
No matter who you are, if you know how to send an email and if you have the money to pay for the ads, you can have your commercials on Forbes, Tech.co, TheNextWeb, etc.
Everyone uses the Internet every time
What is the greatest threat to radio today?
We are in an era of digitalization, technological advancement. Every single day we can find outstanding researchers and discoveries made to help humanity. Every day hundreds of entrepreneurs are emerging, and those who have short-sightedness are losing their businesses.
Radio industry can definitely achieve more significant growth and opportunity in the digital world, but there are so many leaders put things that their only job is to defend the radio and nothing more.
This industry requires leadership that can adapt to the ever-evolving needs of the consumers. It needs leaders who are familiar with the latest technological trends like podcasts, smart speakers, etc. and take inspiration from them rather than considering them as sworn enemies.
The radio industry needs individuals who really understand that they have access to all sorts of tools and user base to transform themselves into a much larger company than just an “old” radio.
Technology is not a threat to the radio, but instead, it’s an integral part of it. People need to understand, considering the Internet as a threat to radio is not worth their time. No one can stop the expansion of the Internet and that the truth.
What they, as a business can do, is to adapt to changing consumer needs and evolve from being just dependent on the radio to expanding their reach to smart speakers, podcasts, online ads, etc..
Radio industry still has a significant user base not only in the United States but also worldwide, and so with proper planning and implementation, they can still play an essential role in marketing.
Media outlets should maintain their core business, after all, that’s their root. But when the core business model isn’t working or is not generating enough revenue, then it’s necessary to divert whatever profit they are making into new businesses, If only they Still want to remain a player in this cutthroat competition.