The following is a guest post from Richard Brody, a colleague and a thirty-plus year veteran of the industry including radio, event marketing, in-store audio, airport audio, magazine, and digital. Past winner of the Rad Report for Boston Media Sales, as well as a past winner of the NEBA Award for Boston Media Sales.
Radio Should Get 20% of Budgets, ROI Analysis Shows
Despite noteworthy differences, such as the dominance of public broadcaster BBC, there are plenty of commonalities between U.S. and U.K. radio. In both countries radio is used by roughly 90% of the population each week with FM/AM the dominant audio medium in terms of time spent listening. So when a U.K. study shows strong correlation between radio ads and shopper behavior, it’s reason for American broadcasters to take notice.
Using IPA Databank figures, the analysis by the U.K.’s Radio Advertising Bureau points to an eight-to-one return on investment for marketers who use radio. That’s in line with a study done by the trade group a year ago suggesting a 7.7 return and just above the six-to-one ROI measure for radio pegged by Nielsen earlier this year in the U.S. “The data here indicates that including radio in the mix significantly increases the effect on the client’s profits and margins,” concludes Les Binet, head of effectiveness at ad agency Adam & Eve DDB, in the study.
But an even bigger conclusion addresses radio’s place in the overall media landscape. When all the numbers are crunched, the report says rather than its current single-digit share of revenue, radio should get 20% of advertising budgets if marketers truly want to boost their campaign’s ROI. “Audio can play an important role not just in ‘activation’ campaigns but also in longer-term brand-building activity, making it a highly valuable medium and something which advertisers should not undervalue,” Binet says.
The study also suggests more radio commercials include musical elements, estimating they can increase intent to purchase and boost actual sales effects by 10% to 30%. “Music increases attention to advertising and makes people more likely to recall the ad, the brand and the message,” it says.
Read the full report HERE