Commercial radio enjoys record ad revenues
Following a record 2016, commercial radio secured almost £680 million in ad revenue last year, its highest ever figure.
Year-on-year, radio adspend was up 5.2%, outperforming Warc's total 2017 growth estimate of 4.7%, according to Radiocentre, which provides the figures each year in its role representing commercial radio.
All formats, including local and sponsorship and promotion, saw increases in revenue, however there was especially strong growth for both national spot airtime and digital advertising in 2017.
According to Radiocentre, 12 out of the top 20 radio advertisers now spend more than 20% of their total advertising budget on radio, and over half of those same advertisers increased their spend by 40% or more.
Sky remains the UK’s biggest radio spender increasing spend on the medium by 46%. The proportion of total media budget Sky allocates to radio also grew by over 50%. However, the likes of Tesco, which used radio for its Food Love Stories campaign, remains high at £7.8m, while Amazon Music and Prime boosted it spend by 118% to £5.2m. eBay also increased its spend by just under 40% to £8.4m.
“Commercial radio is currently enjoying really positive momentum in terms of both audiences and ad revenues," said Siobhan Kenny, CEO of Radiocentre.
"It’s great this success is attracting new advertisers to the medium and encouraging existing advertisers to increase their commitment.”
The latest listening figures for commercial radio remain strong despite a dip at the back end of 2017 in weekly reach and total hours.
However, digital listening is a growth area, which some analysts believe marks a transition of digital platforms into mainstream audio listening.
Commenting on Monday's revenue figures, Liz Duff, head of media and investment, Total Media, said 2017 saw a "cultural shift" towards audio, thanks in part to the rise of virtual assistants.
"We also saw people more willing to just sit there and listen, with the growing popularity of podcasts and audiobooks," Duff told Mediatel.
"On the back of this shift in behaviour it is no surprise that we have seen commercial radio take its highest ever figure, outperforming all expectations. Brands are recognising the merits of audio, harnessing the ability to talk directly into the ear of audiences, thus building a more sustainable emotional connection with the people listening."
Duff added that the next step for brands looking to be the most impactful in this space is to create a brand voice, making them "instantly recognisable" across the growing array of audio platforms.
"Overall, listening is here to stay and brands need to get on board or risk becoming background noise," she said.