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AG News: 7/10/2007

Radio Advertising Sales and Accountability

It's been a longtime coming. But, now that it's arrived, look for accountability in radio advertising campaigns to take root and grow.

Understand that accountability for radio advertising campaigns is about as welcome as electronic invoicing in the radio industry. Despite its (accountability's) lauded reception in the online world and radio's drive to use the Net, the fact that there's a way to calculate ROI on a radio ad campaign using statistics is frightening to many people.

Does a radio campaign deliver similar ROI as, say, a web-based advertising camapaign? We're at the initial stages of determining this. Will an advertiser spending "x" amount on radio realize the same level of return as that generated from a similar "x" dollar amount being spent online or in other forms of advertising? Worse, will spending less with the "others" deliver the same ROI (or higher) as radio?

A recent campaign, delivered over three major Cleveland stations, gave me an opportunity to calculate ROI and compare it to an adjunct point-of-purchase display costing far less. At a glance, it became evident that radio costs far, far more to deliver nearly the same results.

Objective: For the advertiser to collect data on area residents. Two methods for reaching this goal were used, each revolving around a contest with a grand prize trip to Hawaii (plus, 29 other prizes; from a laptop computer to $100 certificates to some very upscale restaurants): 1) a radio campaign across three major stations, over seven weeks, and costing $27,000+, and 2) a display window at Northern Ohio's largest, newest mall, featuring a stand-alone touch-screen kiosk sign-up. Same theme, same grand prize. The kiosk and window dislay cost for the same time period was $1,400. The metric was how many people were prompted to register from each.

You know what radio commercials sound like. Having produced over 10,000 of them, it's fair to say that I carry an "expert" level of sophistication in creating them, and do understand how to motivate listeners to action. So, let's just concentrate on how the window display and touch-screen registration kiosk appeared at the mall.

To make things as equal as possible, the study of affidavits of performance allowed a look at when a radio spot played. A time stamp on each registration showed if there was an immediate response. Daily totals for the radio campaign and the kiosk entry platform showed if that day's radio spots generated as many registrants as the kiosk with its 3,000 or so passing consumers.

The result? In the end, each registration generated from the radio campaign cost $143, each from the kiosk $8. Radio delivered 51% of registrants, the kiosk 49%.

Don't get too rattled. Comparing ROI's is still in an embryonic stage. Though, you may look for it to soon become widespread in certain styles of advertising campaigns, i.e., where a specific action is defined by the advertiser as being their yardstick for success.

ROI, accountability, tracking, analysis, these are all words that, until now, have been barely mentioned with radio advertising sales departments. Only, the internet - or, more appropriately, the ability to collect consumer data - is changing that quickly.

Looking at ROI has become a standard procedure for media buyers because that's how their clients are measuring them. In the not too distant future, radio will be made to answer to this metric with great frequency.

If the radio industry does not start looking at how to deliver these numbers, advertisers will. Then, dazzling the client with a long list of Arbitron breakouts won't carry the weight that it once did. The simple question will become, "How many responses did I get?" And radio better be able to calculate an answer - because the customer will know.

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President, Audio Graphics
Ken Dardis
Online Since January 1997

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