Recession Impact on Radio Advertising
The industries most likely to maintain or increase their radio advertising budgets during a recession are Retail, Restaurants, Technology, Finance, and Real Estate.
- The retail industry allows customers to purchase goods and services from various types of merchants.
- The retail field consists of supermarkets, department stores, chain stores, specialty stores, variety stores, franchise stores, mail-order houses, online merchants, and door-to-door sellers.
- In 2018, the retail industry spent the most on radio advertising $502.8 million.
- During recessions, the retailers excel by going back to core products and using vast economies of scale to give cheap goods to consumers.
- Even the people who do not like discount retailers, end up shopping there in a recession.
- This industry revolves around retail of prepared foods, and their operating performance is influenced by many of the same factors that affect traditional retail stores.
- Restaurants are one of the top ten industries that spend on radio advertising, with a spending of $155 million in 2018.
- As an instance, restaurants like Pizza Hut and Taco Bell took advantage of McDonald’s decision to drop its advertising and promotion budget in the 1990-91 recession.
- As a result, Pizza Hut increased sales by 61%, Taco Bell sales grew by 40% and sales of McDonald's declined by 28%.
- The industry involves research, development and/or distribution of technologically based goods and services.
- The businesses in this industry often revolve around the manufacturing of electronics, creation of software, computers or products and services relating to information technology.
- Technology is one of the top ten industries that spend on radio advertising, with a spending of $76.5 million in 2018.
- Marketers in the technology industry often change the ad message and use short-term price incentives to match the economic climate with consumers who are seeking a good deal.
- It was also noted that while sales for food were decreasing in 2008, sales for expensive tech-toys such as $1,000 TVs and video-game systems were on the rise.
- For instance, tech company Amazon continued to innovate with new products during 2009 recession.
- In Amazon, new Kindle products were sold more than the printed books in the same year, which was one of the many reasons of growth by 28% in the same year.
- The financial industry includes the circulation of money, lending of funds and managing of investments.
- Financial is one of the top ten industries that spend on radio advertising, with a spending of $191.3 million in 2018.
- Individuals with assets need help to manage them, especially when the recession hits.
- During these times, people seek guidance on how to protect their assets and are more concerned about the stability of their investments; thereby the financial advisors often observe an increase in their workflow.
- Real estate brokers bring together buyers and sellers of property, assist in price negotiations, and facilitate the work involved in deals from an initial interest expressed through money being exchanged at closing.
- Real Estate is one of the top ten industries that spend on radio advertising, with a spending of $204.8 million in 2018.
- Individuals who may not be able to afford to buy a home during recession, or for those who were forced to sell for economic reasons often turn to rent if they do not have other options available to them.
- Rental agents, landlords or property management companies are likely to thrive during a recession.
YOUR RESEARCH TEAM APPLIED THE FOLLOWING STRATEGY
To identify some industries most likely to maintain or increase their radio advertising budgets during a recession, we leveraged a compilation of credible databases and leading publications.
Due to the lack of any pre-compiled reports on the subject, we used the following triangulation.
i) The industries that are currently spending most on radio advertising and at the same time have not been affected by the recession in the past; or
ii) The industries that are currently spending most on radio advertising and have not slowed down their advertising during the recession in the past.
With this triangulation, it can be hypothesized that the industries which corroborate either of the two aforementioned criteria are likely to maintain or increase their radio advertising budgets during a recession because they are already spending high on radio ads and have not been affected by the recession in the past.
First, we looked up for industries that spend the most on advertising. We looked up in reports and databases such as Statista, rbr.com, eMarketer, insideradio.com, vox.com, and many others. We used the Statista report to identify the 10 industries that spend the most on the radio on advertising.
Next, we looked for industries that were either not affected by recession or did not slow down their advertising during a recession. For this, we looked up for industry-related articles and journals such as Forbes, FranchiseBusinessReview, Investopedia, ProfitableVenture, self-made.io, entrepreneur.com, thebalancemb.com, small biz trends, adage.com, hbr.org, TheDrum, NYTimes, marketbusinessnews.com, and many others.
Lastly, we filtered out industries that corroborated both criteria and presented them as Key Findings.