July 05, 2023

Radio

Yulia Andryushova in the Annual Russian Advertising Yearbook 2022!

Yulia Andryushova

Director of Business Communications and Analytics, GPM Radio,

Co-Chair of RACA Radio Committee,

Expert of Gazprom-Media Sales House

Radio advertising market, 2022: growth drivers, special projects, and new clients

The growth of the radio market is outpacing the growth of the media market

All year, the volume of the radio advertising market showed better dynamics than the indicators for the entire media market. According to experts, Q3 and Q4 of 2022 were the most successful. In 2022, the overall market growth exceeded 5%, and the growth in its segments was +7.4% (Moscow+Network) and +3.1% (Regions). In most major cities of Russia, the increase in advertising budgets ranges from 3% to 10%. In Q4, the volume of the Moscow+Network segment exceeded 2.7 billion rubles for the first time in 8 years.

Diagram Volume of Market and Main Segments of Radio Advertising, 2021-2022, billion rub.1

The radio market is becoming more balanced

In 2022, significant changes occurred in the categories of goods and services that are advertised on the radio. The Public Sector category has gained the lead in terms of radio placements. The past few years have seen the growth of placements from Russia’s national projects on radio stations. National projects related to demography, small and medium business, education, and the digital economy were heard on the radio more often than others. In its communication, the public sector actively uses different formats of commercials, from direct placement to special projects with non-standard approaches. According to GPM Radio’s Analytical Department, the share of the Public Sector category is estimated at 19% on the national and local advertising market in Moscow.

Motor Transport and Related Products, the unchallenged leader on the radio for many years, began to lose its position in 2020. Sanctions restrictions have cut the segment in half compared with 2021. It has moved from first to sixth place in the ranking of categories. The Chinese and Russian car industries are the main advertisers in this segment. The demand for used cars and repairs, related products, lubricants, and filling stations has increased, which has resulted in the return of advertisers who had previously reduced their advertising budgets on radio (i.e., Carprice), and new clients have also appeared (Carglass, etc.).

Clients in the digital sector are of particular interest to the Russian market.

This category includes e-commerce, social networks, service aggregators, Internet cinemas, and major brand ecosystems. In 2022, the category ranked 3rd place with a share of 12%.

Table 1. Shares and Dynamics of Categories of Goods and Services Advertised on the Radio in the Moscow+Network Segment, 2021–2022, %2

The Real Estate category is regaining its position. Growth in the budgets of advertisers was observed in the local segment. The main advertising message usually contains information on the building project and a price quotation.

New clients on the radio

Changes in approaches to ad sales on the Internet have contributed to the return of small and medium clients. According to the estimates of Choose Radio, about 11% of budgets in the regions were the result of the redistribution of funds from the Internet to radio. Digital has been complemented by brands such as Apteka.ru , Sutochno.ru, Lamoda, Cyan Group, and Citydrive. Also worth noting is FMCG. It was only in 2022 that clients of this category turned their attention to radio. They include three coffee brands (Carte Noire, Poetti, Egoiste Noir), Martin seeds, Baisad pasta, Laplandia cheese, Dalpromryba, and Rich juice.

Western and domestic brands on the radio

Radio has remained mostly unaffected by the departure of Western brands. The share of foreign advertisers in 2021 who left in 2022 amounted to a maximum of 15%, which is less than 80 clients. They include Mitsubishi Motors, Toyota, Volkswagen, Berlin-Chemie Menarini Group, BMW, Mazda Motor, Hyundai, Daimler AG, Nissan, and Mastercard, to name just a few.

In 2022, Russian brands appeared, such as Kari footwear, Stolplit, Topol (septic tank), Skad (disks), Aksion (mincing machines), Apteka.ru , Sutochno.ru, Baisad, Martin, and many others.

Special projects

The use of non-standard approaches to ad placement is another trend that has been observed on the radio over the past few years. The share of special projects in the revenue structure of different holdings can reach 10% to 30%. Clients prefer projects that use various mechanisms, including those that allow the collection of data about the audience of potential brand consumers. Radio has long gone beyond the boundaries of the airwaves, and client-oriented projects use communication via social media, websites, and video services. Today, radio can implement projects with any regionality, be it local, multilocal, or federal. Radio hosts have also undergone a transformation, from on-air DJs to bloggers. Special projects on the radio can compete with projects on other major media platforms.

Podcasts

Audio advertisement is not limited only to placement on the radio. Podcasts are of interest to clients, but they remain a niche format. Development in this area is restricted by the cost of content production and promotion, as well as the delayed effect of the number of listens.

The Russian podcast market can be characterized by the following figures:³

11,500 podcasts are listed in the Yandex Music catalog, three thousand of which are active;

13.3 million people in Russia listen to podcasts, with an average duration of 22 minutes every month;

85% of podcasts are listened to using mobile devices (according to Mediascope)

The ad volume in podcasts in Russia is rapidly growing. According to IAB Russia, their advertising revenue in 2021 amounted to 330 million rubles. No data for 2022 has been published yet. For comparison, in 2020, IAB Russia estimated the volume of advertising budgets for podcasts at 160 million rubles, while in 2019 it was 70 million rubles. Of the advertising revenue from podcasts, 75% comes from ad placements integrated by the show creators, and 25% of Russian podcasts earn on the production of original shows for brands.⁴

The radio industry is active in the development of podcasts using on-air content. The integration of clients into podcasts and the creation of special podcast series oriented toward advertisers’ brands are part of a special project that combines broadcast and digital parts. The effectiveness of this tool has been repeatedly confirmed by the audience. In 2022, the top 10 most-listened podcasts on Sound HiFi streaming were:

1 I’m Out of the House Today

2 Hrum. Fairy Detective (Detskoe Radio)

3 In Short, the Story Is

4 Рамблер, какие новости?

5 Rambler, What’s the News?

6 Not That Way 18+

7 Big Stand UP (Humor FM)

8 Kuji Podcast

9 In Short

10 Niche Svyatogo

Diagram 2. Survey on advertising in podcasts: Have you noticed ads in the podcasts you listen to?5

Diagram 3. Survey on advertising in podcasts: What types of advertisements (advertising integration) have you heard in podcasts?5

Engagement techniques in advertising are of interest to more than just young people. Interactive advertising in podcasts (voice integrations with an offer to switch to social media, enter a contest, etc.) is attractive to 42% of the audience. The listeners in the age categories from 16 to 24 years and from 25 to 34 years respond most actively to this form of advertising, at 54% and 46%, respectively. These indicators are naturally lower for the older audience: interactive advertising was preferred by 37% of respondents aged from 35 to 44 years and by 30% of those from 45 to 55 years.

Growth of audio content listening devices

Smart speakers

According to M.Video-Eldorado, about 3 million smart speakers with voice assistants were sold in Russia by the end of the year, which is 2.3 times more than in 2021 and 6 times more than in 2020.F+ tech-Marvel also agreed with the market estimate of 3 million devices.

The average spending for the year was about 8000 rubles, in December, it was about 7500 rubles. Based on this, the volume of sales in this segment in monetary terms could be 24 billion rubles. According to F+ tech-Marvel, the Russian market can be estimated at 20–25 billion rubles.

According to M.Video-Eldorado, Yandex devices were the most popular models.

F+ tech-Marvel estimates that the company’s market share is 89%, VK accounts for another 9%, followed by Sber and other brands (1% each).

Smart speakers continue to be actively integrated into the life of the socially active population. In Russia, 10.6% of radio listeners aged 20–55 tune in to their favorite radio stations. Radio stations with the soft-music format and children’s content are those most often listened to through smart speakers (GPM Radio data). Private monthly data is available to the holding for audience analysis.

Diagram 4. Which of these smart audio speakers with voice assistants are known to you?5

Diagram 5. Which of these smart audio speakers with voice assistants are you using now?5

For the radio business, smart speakers are not only devices for the distribution of streams, but also for advertising which actively promotes its products through the medium. It is worth noting that speakers are often the desired prize in the on-air sweepstakes that radio stations arrange.

Diagram 6. How does the presence of advertising affect your experience of using smart speakers with voice assistants?5

Studies of the audience and the effect of advertising on the radio. What’s new?

Audio marketing

Audio marketing is term that is often heard in the Russian advertising market. Companies such as Unisound, SberSound, SberMarketing, and others have become actively engaged in studying the effect of sound ads on consumers. The creation of audio logos, the testing of commercials before the launch of advertising campaigns, the division of consumers into clusters through neuromarketing technology, the study of voices are all actively used in audio now. Large brands aiming at a long-term market presence necessarily use sound logos among other tools, which appear not only in audio ads, but also in the audio range of video formats. A single audio track on several media enhances the media-mix effect. Audio logos contribute to the generation of loyalty and create emotional bonds with the brand at the unconscious level. The placement of an audio logo in the first 3 seconds of a commercial and its use at least a couple more times in the 30 seconds gives a clear idea of the advertised product and is a recipe for an effective commercial.

Tsifrasoft is an automatic content recognition technique

Mediascope offers the conversion of a radio stations’ audience measurements into an electronic format. The company has announced a new methodology for radio measurements, which can replace surveys. The test product was presented at the National Advertising Forum. The media meter allows the measurement of radio consumption and the audience through the Tsifrasoft software solution. A mobile application is installed on the panelist’s phone, which determines the radio station listened to by the respondent through the external microphone. Mediascope has already tested the tool, and its test project has reached the stage of minimum viable product (MVP). Currently, the meter collects daily data on 29 radio stations with 1800 panelists who have enabled the audio monitoring option.

Table 2. Mediascope’s Audience Measurement Methods.

Assessing the Effectiveness of Internet Advertising

Radio holdings continue to improve the effectiveness of their ad evaluation methods through both active interaction with research companies and in-house studies that allow the collection of a relevant “evidence base”. In particular, a survey performed on one of GPM Radio’s own platforms this year showed that 69% of Russians notice advertising on the radio. Mediascope’s data on Moscow is similar: 65% of the audience keeps listening to the radio station when advertising airs. And, no less importantly, 55% of respondents, having heard about a brand or service on the radio, search for information on the Internet. At the same time, about one third of the entire audience chooses not only traditional, but also online radio listening methods, enabling the industry to get new tools for the evaluation of the effectiveness of campaigns. Radio Statistics is one of them. Data is collected from all devices on which users can listen to broadcasts today: websites, mobile applications, Smart TV, smart speakers, and partner audio platforms. The evaluation of the effectiveness includes outreach to unique users, contact frequency, and the completeness of listens to advertising. Many radio stations are connected to this system, which allows them to receive post-campaign reports on broadcast campaigns on the Internet. This option is available to the clients by contacting any holding.

Table 3. Example of Report on Evaluation of On-Air Ad Campaign When Listened to on the Internet.6

Total reach of the advertising campaign for said period:

Geography: Russia.

Number of releases: 46.

Reach (unique listeners listening for more than 5 seconds): 171,803.

Number of advertising contacts (listening for more than 5 seconds): 471,040.

Frequency of contact with advertising message: 2.74.

% of complete listens: 95.4%.

¹RACA Data

²Analytical Department of GPM Radio

³Data of Podcast.ru Service

⁴IAB Russia

⁵Joint Study by Gazprom-Media Sales House and Tiburon, November 2022

⁶Radiostatistics, GPM Radio

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