Why And How AT&T Succeeds With Radio
by Ed Ryan
Nearly everyone in our industry we speak with, including those who report to Wall Street, says revenue is rebounding. ?Cautiously optimistic? is probably the best way to describe how owners and GMs are feeling about revenue heading into Q3. A category that?s been good to radio is wireless. The RAB says Verizon and AT&T spent more than $900 million on radio at the national level in 2010. Tack on what each and every one of you gets from the local stores, and wireless turns out to be a killer category. It?s intensely competitive, and as companies fight to win market share, radio is going to benefit.
In 2010, according to the RAB, AT&T spent $504 million on radio advertising. We decided that was a number worth further investigation, so we picked up our AT&T iPhone and dialed the office of Daryl Evans, who is VP of consumer advertising and marketing communications for AT&T and responsible for where a lot of the advertising money goes. He says the competition in his category is ?vicious.?
Evans tells Radio Ink that AT&T uses radio mostly ? 80 percent ? to drive home the price of products and get people to the local stores. ?Radio is a good local vehicle for us,? he says. ?We have a lot of variation around the country, in terms of the offers. Some offers we do nationwide, other offers we do on a local basis. Or the various markets will pick certain offers, and we?ll run something different in Oklahoma City than we will in Dallas. Radio allows us that type of customization.
?It?s also a good awareness-building vehicle for us. Whether it?s 60-second produced radio or DJ chatter, both of them allow us to raise awareness around offers. For instance, we ran the iPhone 3GS at $49. Radio is a great environment to get that out. Most people know what an iPhone is. Getting that $49 price out for us ? radio can get us there.?
A company like AT&T is always evaluating and re-evaluating what works. We wondered how Evans gauges success when he uses radio. What determines a successful campaign? ?That?s a great question,? he says. ?I guess we look at two things. One, we watch what our in-house models tell us about what will probably happen as we allocate media between television, newspaper, online search, outof- home, and social. That will tell us what happens to new customers, and it will tell us what happens to new customers minus the ones that leave, which is what we call ?net customers.? Our models are very accurate. We have the luxury of large budgets in media, so we can invest a lot in models and measurement tools to try to quantify what happens when we make various media decisions.?
He goes on, ?The second thing is, we keep very close tabs on traffic. Foot traffic in our retail stores, traffic on our websites, traffic to our call centers. So we measure both ways. We measure traffic, or ?touches,? to AT&T, and the models tell us what happens when we shift media between the various media types.
?Actually, our models are pretty granular. We can tell by DMA what happens when we shift money around. When we get down in markets in places like Louisiana and Mississippi, newspaper still works really well down there. In San Francisco, newspaper is not a very powerful vehicle for us. There are markets out there where radio is a very effective vehicle, and other markets where radio has a weaker demand curve.?
Why should other advertisers use radio? What?s the benefit? ?Radio is a great awareness vehicle,? Evans replies. ?I think it?s a great way to localize your message. I am a fan of both 60-second and DJ chatter. I am probably a larger fan of the DJ chatter format of advertising. I love having the DJ just talk about the product.
?I don?t think we are fooling the consumers. They know the DJs are being paid, but it?s way closer to their voice than something we try to produce. I think it?s a great way to build up knowledge of what our offers are. In some brandbuilding instances, in our business, when we?re talking about network improvements on the local level ? we?ve added towers in Little Rock or whatever ? I think it?s a great way to build that awareness up very quickly.?
Ed Ryan is the Editor-in-Chief at Radio Ink Magaine
Contact him at edryan@radioink.com
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