For years, physically being in a car to listen to radio dominated. In Larry S. Miller’s research, he reports by 2020, 75% of new cars are expected to be “connected” to digital services, breaking radio’s monopoly on the car dashboard and relegating AM/FM to just one of a series of audio options behind the wheel. And, according to the U.S. Department of Transportation, the typical car in the U.S. was 11.6 years old in 2016, which heavily explains why in 2017 we saw a struggle in the radio industry as consumers began to buy new cars faster than ever, more interested in digital features than the cars themselves.
Within the home, the popularity of “smart speakers” such as Amazon Echo and Google Home, which do not have an AM/FM antenna, have started shaping home entertainment without broadcast radio.
Flash forward to 2019, and it’s clear radio has begun to make the necessary changes to keep up with an ever-evolving digital world. By the end of Q3 2018, AM/FM radio’s share was actually 8X bigger than Spotify and Pandora combined. One could argue this increase came from enhancements across the board as it relates to adapting current day “traditional” digital marketing (social media, email..), but what’s extremely noteworthy is the discovery of the marketing buying power of their major audiences - an audience they’ve struggled to reach.
Millennials, also known as Generation Y, are the most-coveted consumer demographic from a marketer-engagement perspective, according to Nielsen's most recent demographic study. Already having the most spending power of any generation and making up the majority of the workforce by 2025, it is vital to understand Millennials consistencies in advertising and the important role that they play. But, right behind Generation “Y”, comes Generation Z, who Forbes reported is already on track to become the largest generation of consumers by the year 2020, as they account for $29 to $143 billion in direct spending. Moreover, according to the U.S. Census Bureau, this group makes up 26% of the population (more than 68 million people), making them larger than both Millennials and Baby Boomers.
With all this knowledge, it begs the question - why were they so difficult to reach? Realistically, the reason is twofold: lifestyle & a general lack of interest in “traditional” media consumption.
While Millennials were phased in to a digital world, Generation Z grew up knowing nothing else. Both of these groups prove to be mobile-centric, but Gen Z spends a significantly higher amount of time on mobile than any other device. In fact, GlobalWebIndex’s “Trends 18” reported the mobile-first mindset of Gen Zers has a profound impact on their other media behaviors. Gen Z spends 20 minutes less per day on broadcast TV compared to their Millennial counterparts. GlobalWebIndex’s “Trends 18” also reported they (Gen Z) are behind for online TV/streaming, but it’s credited to (in part) because of their love of all things social and all things video – which leads to a demand for short bite-sized content. Moreover, when it comes to time spent on traditional media, Millennials and Gen Z trail far behind adults 50-64, who spend more time per day on media than any other group.
Follow & Subscribe to the RadioMax Blog to receive updates on part 3 of Radio's Digital Adaptation. Part 1 is available here!