Major consumer packaged goods (CPG) giants return to radio

CPGs, frustrated by digital advertising, are increasing their radio advertising spend in 2017. As stated by Cumulus Media/Westwood One chief insights officer Pierre Bouvard, “We’re getting interest in radio from a category for whom radio hasn’t been on their radar screen for 40 years.”

Procter & Gamble, one of the largest and most successful CPG companies, is following this trend. Compared to last year, in the first half of 2017 Procter & Gamble purchased over 300x more radio spots. For example, P&G purchased 18,998 radio ads for Vicks and 19,440 radio spots for Tampax, two products they did not advertise on the radio in 2016. P&G also purchased 17x more radio ads for Patene in the first half of 2017.

Furthermore, Kao Brands doubled its radio spend for the popular skin care product BiorĂ©. Kao also bought 41,723 radio ads for Jergens in the first half of 2017 after not purchasing any radio at the same time last year. Similarly, after not buying any radio advertising last year, Unilever purchased 56,015 radio ads in the first half of 2017. Other major CPGs companies that have significantly increased their radio advertising spend include Bimbo Bakeries, CSC Brands, NestlĂ© Waters North America, Johnson & Johnson and Reynolds.

What happened with digital?

CPGs, among other advertisers, are questioning the reliability of digital advertising. Digital’s narrow targeting, ad fraud, viewability and transparency are among their key concerns. As Bob Phillips, chief revenue officer at CBS Radio explains, “Narrowcasting digitally is excellent for delivering consumers already familiar with and interested in a product or brand, but does little to populate the top of the sales funnel.” As advertisers re-discover the importance of broad reach and frequency, they are learning that digital advertising – in all it’s technological glory – isn’t everything it’s chalked up to be.

Why radio?

Simply put – radio delivers.  Unlike digital, radio is affordable, reliable and effective.  As Radio Advertising Bureau CEO, Erica Farber, explains, “We think that part of the increased interest is a result of recent concerns regarding brand safety, transparency and accuracy in measurement. Brand managers and their agencies are understanding that radio has the ability to not only provide the consumer reach and engagement that they need but also drives traffic to the retail environments where their products are sold.” For example, radio reaches consumers at key shopping times and is most often the last medium a consumer is exposed to before making a buying decision.

Additionally, in terms of call-to-action and ROI, marketers are learning that, compared to digital, radio consistently delivers more and provides more reliable results. Justin Nelson, senior media analyst at S&P Global, explains, “I do feel like there is better tracking and analysis of the return on investment that radio is offering opposed to digital.” Furthermore, radio’s ROI is hard to beat. A recent study conducted by Nielsen Catalina found that in the CPG category radio provides a return on investment of $7 for every dollar spent. 

Radio also offers advertisers unique opportunities to engage and interact with consumers. For example, Christine Travaglini, president of rep firm Katz Radio Group’s Christal Radio and Katz partnerships, explains “Radio gives CPG brands the opportunity to connect and interest with target consumers through multi-platform campaigns, such as deejay endorsements – both on air and on social media – that allows deejays to become true brand ambassadors sharing shopping and user experiences, providing a fully integrated approach to local ‘influencer’ marketing strategies.” CPG’s return to radio is no surprise considering radio’s reach, frequency, efficiency, engagement opportunities.

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