want a consistent 12x Return on ad spend? Buy radio ads.

picture of a radio on a wooden chair in a farm field

want a consistent 12x Return on ad spend? Buy radio ads.

Radio has, for many advertisers, long been undervalued. Relegated to the dark corners of major marketing campaigns budgets and bought one off by local advertisers because of a persistent rep trying to hit their quota by cold calling. I once rode in an Uber about 2 years ago driven by a radio account executive for a local Jazz station who, when he found out I mostly was a digital marketer, accused me of ruining the industry. (At the time I mostly worked on Facebook ads.)

Compared to TV and digital even, radio ads get a fraction of the budget that other mediums command. Yet it’s nothing to scoff at. In 2018 radio commanded a massive amount of spend going over more than $17 billion dollars.

Now, a study by Nielsen Catalina and Westwood One is claiming that radio is commanding a whopping average of 12x return on ad spend for businesses. Nielsen is an absolute powerhouse of data, and through a conglomeration of multiple data sources they have access to, are able to essentially match a sample of the people who listened to the ads and then match it up with what they actually bought in order to determine what the ROI was for each campaign.

Pretty neat right?

So what does this mean for you? That radio is a massive steal at the moment. Here’s the thing about marketers, including myself to a degree, is that we tend to chase hype. People hear that some new platform is crushing it or some strategy is delivering some absurd result and they drop absolutely everything to run and be a part of it Often times in the process, forgetting everything that has worked so well for them in the past. What I’ve come to learn is actually the opposite. If people declare something dead, or wholesale ignore it, it’s usually a fantastic deal.

Enter radio.

I want to clarify here too that I’m not talking about just traditional radio. Digital streaming services like Spotify, Pandora, Soundcloud, etc. are woefully undervalued as well. It’s a downright epidemic.

So how is it that radio is so valuable and delivers such a great return? Surely if it was this great everyone would be all over it right?

So that’s actually part of the reason that radio works so well. It really comes down to 2 factors that makes radio so valuable.

  1. It’s woefully under-priced.
  2. It’s borderline ubiquitous.

Radio isn’t magically more effective than say TV ads, but because it’s so cheap and because most people interact with either traditional radio or streaming services on a daily basis, you can get a high frequency of listens to your ads where you can reach your same customers over and over. Through that repetition you’re able to gain top of mind awareness and reach potential or existing customers with a number of different messages to drive your point home.

When it comes to marketing for small and medium sized businesses especially, it usually comes back to “what’s the ROI on that?”. While I generally tell people to look at the medium and long term implications of a campaign and understand that brand building is a process, most people want a performance marketing program with at least somewhat measurable results. This study is so useful because while radio can be a bit hard to track for the average advertiser, you have actionable data that shows you can drive a great return on your marketing budget without having to rely on an overused and often ineffective for many industries direct response approach. Food for thought if you’re a small business owner.

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