P&G looks to radio to replace TV reach

Procter & Gamble, the FMCG giant, is returning to radio in light of tough economic conditions, faltering TV reach, and a new way of planning around reach rather than spend.

That’s according to a new piece in Ad Age, which reports on the 43% year-on-year leap in the company’s broadcast radio advertising spend, most of which went to local radio.

Why it matters

Audio has traditionally been a less sexy medium than anything involving video, but radio has a rich heritage as an advertising medium that still works. For instance, it retains similar levels of effectiveness to TV while reaching vast audiences at less than a fifth of the cost of connected TV and half the cost of linear TV.

Part of its beauty, as WARC’s Best Practice on Radio notes, is that it operates at all levels of the purchase funnel, helps to engender trust in the brand, and can significantly boost the ROI of other media.

What’s going on

It’s a surprising story with surprising details: not least that American 18-49-year-olds now spend more time listening to radio than watching traditional linear TV, according to Nielsen.

• What’s interesting is that radio audiences aren’t necessarily growing but, unlike TV, they have recovered from the pandemic and have remained far more stable.
• Part of the logic for P&G comes down to CPMs and their upward trajectory in the age of connected television, where they sit between $35-65, versus $10-15 for linear TV and $5-6 for radio. Radio has, reportedly, increased reach by 44% beyond TV.
• It also plays into a new commercial reality for companies like P&G, where squeezed margins require marketers not to look for digitally measurable bang for buck, but rather broad and regular reach.

But there are other benefits to radio, especially at the local level, and P&G’s well-publicised efforts to spend more media budget with black-owned media has helped to boost the company’s radio spending. Radio is also a very robust medium among young Spanish-speaking audiences, too.

Sourced from Ad Age, WARC