Radio's New Norm in Numbers

New Media Analytics and Metrics for the Radio Industry

Radio, Advertising, Audio Programs, Indie Artists: Audio Online.

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AG News: Monday - 5/10/2010

Radio's New Norm in Numbers

Numbers: Using them helps us evaluate, compare, adjust, and sell. Emotions evoked by them include joy, sorry, irritation, and angst. In the radio industry, programming and sales make and break careers by the numbers. Could it be that by the very nature of numbers being so intrinsically tied to radio, those in the business have a hard time seeing any other sets of numbers gaining influence?

Conversion rate, time on page, exit rate, bounce rate, and "revenue per visitor" numbers are being used more often. Depending on whether you are gauging ads, traffic, or sales figures, there are even more "number" names.

Media buyers are slowly embracing this new number language written on spreadhsheets. As each buyer tries it out for the first time, they usually leave impressed with the story new media numbers tell. It's all in the read; the further along we go with these numbers, the less dependency is being placed on how many people you have reached.

Setting aside web site visitor counts and the tracking of incoming organic listings, let's use an online campaign I supervised beginning in June 2008 as a demonstration for advertising response.

These are real dollars spent, real impressions and conversions. There's no guessing in how many people were reached or how many reached back. (Though I did adjust all numbers by an equal "X" percent to keep client anonymity - these numbers reflect an exact replication of results.)

The first four months was spent getting a grip on how this company's ad buying system worked. In October 2008, we began adjusting the mechanics to improve response.

Note: The multiple elements required for operating an efficient new media campaign include a landing page system, building analytic funnels, connecting ad buys to the purchase page, and adjusting away from the mindset of "how things were done." That last item is where most heavy work in the radio industry needs to occur.

We started with these numbers in June 2008:

Impressions: 28,033,119
Cost: $8,642.63
Clicks (Response to ad): 51,921
Click-through Rate: 0.19%
Cost per Conversion: $137.18
Conversion Rate: 0.12%
Conversions: 63
CPM: $0.31

Over the next year, focus was on increasing conversions - which improved by 103%.

In July 2009, we implemented adjustments, refined campaign focus, and began making the ad buying process efficient.

Impressions: 12,950,865

Cost: $10,092.84

Clicks (Response to ad): 53,922

Click-through Rate: 0.42%

Cost per Conversion: $79.16

Conversion Rate: 0.24%

Conversions: 128

CPM: $0.78

These moves decreased the previous months numbers (above) by:

78.9% - impressions

41.2% - clicks

40.2% - dollars

31.4% - cost per conversion

At the same time, they increased the conversion rate by 45.8%, and CPM by 183.3%. CPM boost is due to replacing ad network buys with targeted placement.

After six more months of making adjustments on all elements of the campaigns - keyword selections, web site selection, landing page copy re-writing, and reworking the page where customers made the purchase - this is what we saw in December 2009:

Impressions: 2,814,113

Cost: $4,358.66

Clicks (Response to ad): 23,804

Click-through Rate: 0.91%

Cost per Conversion: $20.18

Conversion Rate: 0.91%

Conversions: 216

CPM: $1.55

In eighteen months, this vendor realized a decrease in each of the following: 89.9% impressions served; 54% clicks delivered; 49.5% dollars spent; 85.2% cost per conversion.

At the same time, the business enjoyed the following increases: CTR 347.3%; converstion rate 658.3%; conversions 242.8%.

To achieve this, CPM increased by 400% - from $0.31 to $1.55 for every thousand persons reached.

...And the Cost per Click remained steady moving from 17-18 cents for each person who responded to the campaign.

The summary: Fewer impressions were served, fewer clicks received, conversions dramatically increased while the cost for conversions dropped, and this company was spending far less monthly for its advertising.

Numbers have always been the measuring stick of success. What radio industry veterans need to see is how deeply new media metrics are now delivering the total picture - from the ad campaign to sales.

Just delivering the number of people reached is not going to be an acceptable means of accounting for a radio ad budget much longer. Transition speed will depend on how quickly media buyers embrace this new numbers language, which speaks the truth in minute detail.