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Monday, April 6, 2015

Does Radio Deliver $14 For Every $1 Spent On Advertising?


Nothing is more powerful to a radio salesperson than hard data proving how radio delivers advertisers a return on their investment. When you sell air using ratings that are far from perfect (or no ratings at all), you start your pitch at a disadvantage, especially in the digital age when companies can tell an advertiser exactly how many consumers use their media, how often, and at what times. Radio needs to constantly show advertisers it works, and on Thursday Nielsen released some very interesting data that you can bet you'll hear many radio executives bragging about at upcoming conventions and quarterly earnings calls.

Over the past few years companies like iHeartMedia, Nielsen, and others have been trying to put more hard data in the hands of sellers and Nielsen believes a recent study it conducted has done just that. A first-quarter R.O.I. study conducted by Nielsen, in conjunction with the Katz Radio Group, focused on a telecommunications advertiser. Nielsen and Katz linked PPM data from the radio campaign with consumer purchases using credit and debit card transaction data from more than 125 million Americans 18-plus who heard the ads. Nielsen says the results show radio delivered $14 dollars in incremental sales for each dollar invested in radio advertising.

Nielsen says it was able to come to that conclusion because the listeners who were exposed to the radio campaign spent $210 million more on the telco?s products and services over the three-month period than if they had not been exposed to the radio campaign. "The telco advertiser spent approximately $15.3 million dollars in radio advertising in the PPM markets during the quarter. When the increase in sales is compared with the radio investment level, the study found the return was $14 to $1."

Nielsen also says more money was spent per month during the campaign period among those exposed to the radio ad campaign. "Their outlay was $8 more per month than consumers who were not exposed. The impact of this particular campaign resonated particularly well with millennials, who represent the largest generation of nationwide radio listeners, according to Nielsen?s recent Audio Today Report. In fact, millennials exposed to the campaign had double the increase in their monthly spending ($16 verses $8) for the Telco?s products and services."

(4/4/2015 10:28:09 AM)
What could be "negative" about demanding compelling evidence.
Amazing Richard reminds me of the guy who steps in front of his mirror - only to see Bradley Cooper.
Hell, radio hasn't even figured out ways to produce high quality spots.
My advice: Snap out of it!
(4/4/2015 8:55:03 AM)
As a radio AE, I see this data being used out of context by advertisers for negotiating -ugh! Thank you Nielsen for making my job a bear (sarcasm). It's good to share your data, but this release IMHO should have been released as relevant to local, large, agency, etc, clients. I hope you provide talking points for addressing. I want ROI 3rd party sources, (testimonials for local, small advertisers are still a better bet) but I want responsible data too.
(4/3/2015 10:44:04 AM)
Ronald is the negative sort to which I referred. The ROI of 14 (could be 18, could be 22) is probably correct if all schedules and carryover businesses are included. Radio has UNDERestimated it's worth for decades. It has had an inferiority complex since TV came on the scene and the internet delivered a left hook from which it is still reeling. But, the listeners love it. And the advertisers know it.
(4/3/2015 10:35:57 AM)
Does this broad brush paint in the tight corners of small markets and much smaller budgets?
(4/3/2015 10:17:00 AM)
If these numbers were categorically accurate and, most importantly - consistently demonstrated throughout the medium, advertisers would be buying radio stations.

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