Local consumers may have a gloomy feeling about economic conditions, but their spending has not tapered. This is good news for the 158,041 small business owners in the Detroit area.

According to the latest University of Michigan's Survey of Consumers, sentiment about current economic conditions remains near the all-time low. Concerns about volatile gas prices, rampant inflation, and a looming recession have driven the survey's index down 37% versus a year ago.

Despite these dim consumer sentiments, the U.S. Bureau of Economic Analysis's July report shows that real personal consumption expenditures are pacing well above pre-Covid levels. According to Morgan Stanley research, consumers' ability to spend is being driven, in part, by a massive amount of excess savings accumulated over the course of the pandemic.

Earlier this year, based on per capita spending data from the National Retail Federation (NRF). Detroit consumers were forecast to spend nearly $67.6 billion at retail this year. The current level of spending suggests that shoppers are on track to hit that number.

Of course, for local business owners to successfully compete for a share of this record spending requires marketing. By most key marketing metrics, the best way to advertise is on Detroit radio. This is especially true among business owners who must limit the number of marketing channels that can be used because of economic restraints.

Of all media, advertising on the radio provides the greatest return on investment.

Local business owners have been advertising on Detroit radio since WWJ first signed-on in 1920.  But, back then, there were only two options for reaching a mass audience: newspapers and radio.

Today, though, advertisers have an over-abundance of marketing options both over-the-air and online. But every week, according to Nielsen, 2.8 million adults listen to a Detroit radio station, giving the 101-year-old medium, by far, the biggest reach amongst local consumers.

A new report released last week by Nielsen underscores AM/FM radio's durable reach among all media.

Every week, according to new Nielsen data, 2,778,339 adults tune in to a Detroit radio station. This is more consumers than use social media, access local cable, watch broadcast TV, stream video channels, listen to streaming audio, read a newspaper, or download a podcast.

Based on per capita estimates from the National Retail Federation (NRF), Detroit consumers are expected to spend between $67.6 and $68.9 billion at retail in 2022, a six to eight percent growth over the previous year. Utilizing radio's enormous advertising reach, local business owners can compel shoppers to spend this large pool of cash in their stores and on their websites.

The number of consumers reached is critical to the success of an advertising campaign.

According to a Nielsen study, after the actual content of the commercial message itself, reach is the most potent advertising element that can drive sales. Reach is more important than brand, recency, or even context. Detroit radio provides local business owners with the most significant reach among consumers.

Eighty-four percent of all adults say they will celebrate Mother's Day in 2022. Based on per capita forecasts from the National Retail Federation (NRF), Southeast Michigan consumers are expected to spend $438 million on the moms in their lives. This is a 13% increase over last year.

“Consumers are eager to find memorable ways to honor their mothers and other important women in their lives and are willing to spend a little extra on this sentimental holiday,” said NRF President and CEO Matthew Shay.

The NRF spending projections indicate that Detroit consumers will spend $96.4 million on jewelry and another $72.9 million on special outings such as dinner or brunch. This will be the highest level of Mother's Day spending ever in these categories.

Here is how this large pool of Mother's Day cash in Detroit is expected to be distributed by all retail categories.

The NRF research indicates that men will outspend women 3-to-1 this year on Mother's Day gifts. Most of these dollars will go towards presents for their moms, stepmoms, and wives.

Of all the money spent, Detroit consumers are expected to spend 36% online, 30% at department stores, 27% at specialty stores, and 23% at local small businesses.

To compete for a share of record-high Mother's Day spending this year, local business owners will need to advertise. By most key marketing metrics, the best way to reach holiday shoppers is by advertising on Detroit radio.

Detroit area consumers are expected to spend close to $68.8 billion at retail in 2022, based on per capita spending estimates from the National Retail Federation (NRF). This would be an eight percent increase versus 2021.

To capture significant shares of the increased retail spending, the 158,041 small business owners in the Detroit area would typically invest in advertising. Persistent and pernicious inflation pressures, however, are starting to gnaw away at marketing budgets.

According to the National Federation of Independent Business Owners (NFIB), businesses cite inflation as their number one problem. For many Detroit business owners, uncontrollable wholesale, transportation, and labor costs are forcing retailers to raise the prices they charge their customers. But, for many retail products, inflated retail prices can drive customers away. 

To limit consumer price increases and still make a profit, Detroit business owners, then, are forced to cut expenses, including advertising and marketing. This means it is now imperative that the limited investments retailers can make in advertising must deliver the strongest returns possible. 

According to a recent study by Nielsen, advertising on Detroit radio can provide the best return on investment (ROI) for local retailers.

There are 158,041 small business owners in Southeast Michigan, according to the US Census Bureau. Each of these companies will need larger advertising budgets to successfully compete for a fair share of the expected explosion in consumer spending this year.

Based on new forecasts from The National Retail Federation (NRF), Detroit area consumers are expected to spend between $67.6 and $68.8 billion at retail in 2022, a six to eight percent growth over the previous year.

The NRF's forecasts exclude restaurants, gas stations, and automotive dealers. Included in the numbers, though, are non-store and online sales, which, in Detroit, could reach as high as $16.2 billion this year. This level of spending would be 13% more than in 2021.

Even though the rate of growth rate for 2022 is lower than the 14% jump in 2021, the NRF points out that this year's spending will be well ahead of the 10-year,  pre-pandemic growth rate of 3.7%

To participate in the expected surge in retail spending will require Detroit business owners to advertise. Especially if retailers want to hold their own against the continued growth of non-store and online competition.

When WWJ-AM became Detroit's first radio station in 1921, there was no Facebook, no Xfinity, no Sirius/XM, no Netflix, and no podcasts. It would be 26 years before there was even a local TV station.  Consequently, it was pretty easy for radio to become the number one reach medium among local consumers.

Over the past 100 years, Detroit business owners have come to depend on the mammoth reach of radio among local shoppers to successfully market the goods and services they sell. Advertising on Detroit radio has helped Southeast Michigan companies to survive and thrive during world wars, natural disasters, recessions, depressions, and even a pandemic.

Heading into 2022, local consumers have more media choices than ever before. But, despite the overabundance of social media, video streaming, audio streaming, cable, and other technological marvels, Detroit radio is still the most used advertising medium.

Based on projections from the National Retail Federation (NRF), Southeast Michigan consumers are on track to spend $63-billion with retailers by the end of this year. This would be 13.5% higher than was spent in 2020.

To earn a significant share of these retail dollars, Detroit area business owners are expected to spend $1.6 billion to advertise by year's end, according to Borrell Associates. This company tracks advertising expenditures in local markets across the U.S.

To ensure they are spending their advertising and marketing dollars wisely, many Detroit business owners research how to best target prospective customers by using local media. An exceptional resource for local business owners to investigate the media habits of localconsumers is on the advice section of AdvertiseInDetroit.com.  

Here are the top five most-read articles on the site in 2021:

Every week, according to Nielsen, Detroit radio reaches 2.8 million adult consumers. This is significantly more people than are reached by local TV, cable, social media, streaming video, streaming audio, or newspapers.

Because of its humongous reach, area small business owners advertise on Detroit radio to successfully market the products and services they sell.

Many first-time advertisers on Detroit radio will ask how many times a consumer needs to hear a commercial before they become a customer.  Often the business owner is told that to be effective, a consumer needs to be exposed to a message three times before they will buy.  Unfortunately, this prescription for a three-time frequency is more myth than substance.

A study by Nielsen provides some data-based insights about effective frequency, But first, here's the origin of the mythological rule of three.

To maximize success, every Detroit business owner needs to advertise.

"Think you have a great product?" asks the US Small Business Administration. "Unfortunately, no one’s going to know about it unless you advertise.”

The SBA goes on to say, “Advertising, if done correctly, can do wonders for your product sales, and you know what that means: more revenue and more success for your business.”

According to the US Census Bureau, there are 158,041 small businesses in the Southeast Michigan area. This geography includes Detroit, Warren, Dearborn, and every point in between.  Most of these diminutive companies have limited dollars to invest in advertising.  

Advertising successfully in Detroit is achievable, though, with a small budget if the available funds are invested wisely.  Oftentimes, this means selecting one medium rather than spreading money over several.

So which medium makes the most sense for small business owners with limited budgets? By most key advertising metrics, advertising on Detroit radio is the best option.