• by Sara Sisenwein , February 2, 2015

It came as no great surprise to the industry when advertising budgets allocated to radio continued to fall in 2014. The industry has been constantly threatened by new media that entices advertisers with expanded metrics, optimization capabilities and geo-targeting. So what does this mean for radio advertising in 2015?

First, let’s take a look at what happened in 2014.

Last year, despite the fall in overall radio ad revenue, the medium was able to secure a larger share of the local ad revenue, demonstrating that radio is still a valuable resource for local businesses. While digital media spend continued to increase, standard digital banner ads showed lower clickthrough rates,falling behind mobile, rich media and video. Finally, mobile app usage grew 76% last year, making mobile the new desktop.

While many predict that radio advertising budgets will continue to fall, new technologies inspire optimism for the traditional medium. Through geo-targeting, interactive mobile apps and advanced analytics, radio can optimize its large and diverse audience to compete with digital advertising.

Here are the top radio advertising trends anticipated for 2015:

Cross-Platform: Taking it a Step Further

Radio isn’t just facing the threat of Pandora and Spotify any longer. There are a plethora of other media now competing for the same advertising dollars, including other Internet radio offerings and mobile ads. Radio has one of the largest and most diverse audiences of any medium, so by leveraging the size with a cross-platform interactive experience, stations can compete in a more meaningful way.

Cross-platform advertising is even more important since a recent study by Google reported that many digital ads are never actually seen. With the amount of funds allocated toward digital advertising, the fact that 56.1% are actually not seen by a humanmakes buyers very uncomfortable.

Ad/Promo Testing and Optimization

New mobile technologies integrated with radio will advance the methods by which real-time testing of ads and promotions aired on radio stations are conducted. This is key for stations to measure the popularity of new music and preferences of the listeners and for advertisers to gauge the efficacy of special offers and creative in real-time. These insights will allow advertisers and stations alike to quickly optimize campaigns to produce the greatest response. This testing is done best through a mobile app because it is the quickest way for the audience to respond.

Advertisers Demand Engagement and ROI Data from Radio Campaigns

With new mobile technologies tied to the broadcast, advertisers can measure, track and optimize radio campaigns just as they do with digital. Advertisers are quickly seeing the value radio offers and the direct results tied to it. We predict that these capabilities will have radio dollars moving from digital to radio as a result.

Drive to Retail: Both Online and Offline

In 2015, we predict that radio’s integration of more sophisticated location technology with their mobile app will help stations prove ROI to skeptical advertisers. Geo-targeting and location-based marketing was a notable trend in 2014, so we anticipate that in 2015 the trend will be taken a step further, demonstrating that these targeted ads are not only reaching the consumer, but also driving them into the store.

Mobile will continue to be a major player in 2015, but in a more strategic way. Smartphones and tablets are how many people stay connected and, accordingly, most advertisers are dramatically shifting their strategy towards mobile (46%).

As such, radio stations that leverage mobile strategies will be better positioned to reach their total listening audience — broadcast, online and mobile — driving more revenue to the industry as a whole.