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News From Audio Graphics:
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Measuring a Radio Industry Online Campaign |
Two things were learned over the past week: 1) 2,729 people who visited RadioRow.com's home page were subjected to a series of pictures defining the "Radio Heard Here" campaign; 2) I'm no graphics artist (which was dutifully acknowledged in the beginning).
I know point #1 by looking at results of testing two ads for the "Radio Heard Here" campaign (see below). How this test was set up was explained at AG on April 22. Confirming point #2 is easy; view the ad on the right, below.
I trust you've read reviews of the Radio Heard Here campaign. We won't cover whether it's good or bad. That doesn't matter to us.
Instead, take a look at the response these two ads received. View the percentages of people who clicked on each ad. Online, the click-through rate is all that's needed to see which one worked best.
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Radio industry's logo ad...
produced 6.78% response rate |
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My attempt at artwork...
produced 5.48% response rate |
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Now, we could leave this at these percentages alone. But they do not demonstrate the potential of testing or the ease at which the percentages were gathered. For that we need two more pictures.
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Using Google's Web Site Optimizer, select the test and then "view report." |
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By comparing click-through rates, you are able to determine which ad draws the best response. |
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There's not much to discuss. Math tells us that a 17% better response rate comes from the radio industry-produced Radio Heard Here ad than the amateurishly-produced ad by yours truly. I'll accept defeat gracefully.
But here are a few more items not immediately apparent, which need to be highlighted in this demonstration:
1) 6.16% of ALL persons exposed to the Radio Heard Here ad - either version - responded with a click.
In one week, 169 persons were proved to have sought more information on what "Radio Heard Here" is.
2) Hypothetically, if the Radio Heard Here campaign manager was paying for this exposure at (let's say) $17 CPM,
he/she would know that each response cost them $0.28. 2,742 persons were exposed to the message, so the ad
campaign cost $46.48. Divide the dollars by the number of responses (169) to get your cost per response ($0.28).
3) Add another layer of accountability. If the item at the other end of the Radio Heard Here campaign ad was
a compilation of three songs priced (for this demonstration) at $0.99, and 84 of the 169 persons who clicked on
the ad(s) purchased the product, we can easily calculate that the revenue generated is $83.16.
4) Let's also say that the cost for Radio Heard Here to produce each compilation of music was $0.16.
$46.48 is what it hypothetically cost for our ads to run.
$13.44 is what it cost to produce the compilation music downloads.
$59.92 is the total investment Radio Heard Here had in this short campaign of selling.
$23.24 is the profit generated by this campaign.
But, hold the praise because this is where the internet is grabbing attention. If this were a typical banner ad rate, we'd be talking more in the vicinity of a $4 CPM. So, let's redo these numbers using a rate that's more in line with internet advertising:
$10.96 is what it cost for the Radio Heard Here ads to run.
$13.44 is what it cost to produce the compilation music download.
$83.16 is the gross profit generated from the 84 persons buying the music compilation.
$24.41 is the total investment Radio Heard Here has in this short campaign of selling.
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$58.75 is the profit generated by this campaign.
We used small numbers. But, all amounts are in similar proportions if we're talking about a $100,000 multiple-million impression deal.
The real lesson here is the accountability placed on advertising when selling a product online. When the dollars are traced backed to a source, and that source happens to be ads served on your radio station's web site, you see how advertising accountability can be a double-edged sword.
It's all in the math, and more media buyers are doing it every day.
Oh, about the hypothetical price that Radio Heard Here paid for each of these clicks? At the online ad rate of $4 CPM, which is in line with today's rates, each response cost $0.06 - six cents.
To register, click "Learn Basic Internet Analytics and Metrics." Limited Seating
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