The company presented data that shows that radio is not getting its fair share of ad dollars based on time spent with the medium. Both print and television are getting a disproportionate share of ad budgets.
The Morgan Stanley presentation at the Conversation Marketing Summit was designed to show the potential of Internet/Mobile advertising. You can find the entire presentation at Slideshare, but the two important slides are shown below.
The study compared time spent with each medium to the share of advertising that goes to the medium. For example, only 12% of media consumption goes to print, and yet 26% of advertising spending goes to print. Television is the other medium that gets a disproportionate share of advertising.
The goal of the study was to show that the Internet isn’t getting its fair share of advertising dollars. According to Morgan Stanley, 28% of media consumption goes to the Internet, while only 13% of ad dollars are spent on the Internet.
The study caught our attention because it inadvertently illustrated that radio has the same problem. While 16% of media consumption goes to radio, only 9% of ad dollars go to radio.
And if Morgan Stanley had used more accurate data for radio, radio would have been penalized even more than they claim.
The company used time spent data provided by Forrester. We raised questions about the Forrester numbers last August in a post on TSL. The numbers grossly understate radio TSL. According to the latest Arbitron estimate, TSL is 15:15, well over twice the TSL used in this study.
We estimate that if Morgan Stanley had used more accurate media usage estimates, radio’s time spent would have been even with the Internet, slightly less than television’s, and over twice of print’s.
Using Morgan Stanley’s logic, radio should be billing nearly three times as much as it does.
The second slide from the presentation at the left compares the cost per thousand by medium. Radio is shown as the most efficient traditional medium that Morgan Stanley studied. Radio’s CPM is around $10 compared to newspaper’s $16 and broadcast television’s $27.
The fact that radio isn’t getting its fair share compared to television and print isn’t news. It has been a source of frustration for radio broadcasters for decades. This analysis adds insult to radio’s chronic injury by showing that the Internet is joining radio’s traditional nemeses in taking dollars that should go to radio.
A misguided rush to accelerate Internet usage will only worsen this disadvantage. Radio needs to fix its image now.