Are retailers deaf to radio advertising’s potential?
While retail budgets have been shifting toward digital advertising, a new study shows radio ads, on average, drive 22 percent traffic lift for retailers.
The study from TagStation, owner of the Dial Report radio measurement platform, analyzed 1.5 million radio spot plays for 10 brands in the top 100 U.S. markets, collecting listener data from April through June 2018. The study compared the consumer actions of listeners exposed to radio campaigns to those not exposed to evaluate the impact of radio advertising on average store visits.
Among categories, traffic lift saw the following increases:
- Automotive: 32 percent
- Beauty: 32 percent
- QSR: 23 percent
- Home Improvement: 7 percent
Higher average store visits were seen from listeners exposed to radio ads on Saturdays, Wednesdays and Mondays. Higher regular visits came from listeners exposed to radio ads on Top 40 and Adult Hits radio formats.
Several other recent studies likewise promote radio advertising’s healthy payback. Flexibility, high frequency and affordability are cited as benefits. The medium’s ability to reach a specific audience over and over again as well as deliver messages in vehicles just before the point of purchase are also called out.
According to the “2017 Audio Today Report” from Nielsen, “Marketers and brand managers are rediscovering radio. It’s a mass medium that can deliver targetability and message frequency in markets large and small.” The study noted that AM/FM radio continues to be the top weekly reach medium, as 93 percent of the country tune in every week.
In a column for Adweek, Paul Brenner, Dial Report’s president, further noted that ROI attribution is vastly improving as consumers are using their mobile apps to tune in via smart devices.
Still, Magna’s just-updated U.S. Advertising Forecasts projects digital ad revenue will reach 51.5 percent of total ad sales in 2018. Radio’s market share is expected to be at 6.4 percent, with spending expected to erode 4.7 percent in both 2018 and 2019 due to declining local audiences and weak pricing.
Drawbacks to radio ads include lack of visuals, low attention-getting and ephemeral messaging. A major concern is losing younger listeners to streaming services like Spotify and podcasters.
- Study Finds Retailers See Over 20 Percent Traffic Lift from Radio Ads –TagStation
- Radio Drives Store Traffic – TagStation
- STATE OF THE MEDIA – AUDIO TODAY 2017 – Nielsen
- Groundbreaking Research Proves AM/FM Radio Delivers Strong ROI For Personal Care Brand – Westwood One
- How Radio Can Help Supermarkets Compete With Amazon Go – Adweek
- Radio’s Health Is Better Than You Think, But What’s The Long-Term Prognosis? – Advertising Age
- Magna Advertising Forecasts (Fall Update – Executive Summary) – Magna
Discussion Questions
DISCUSSION QUESTIONS: Are retailers underestimating radio advertising’s ability to target specific audiences? Do you see the medium regaining popularity among retail advertisers in the years to come?
Poll
BrainTrust
Zel Bianco
President, founder and CEO Interactive Edge
Art Suriano
Chief Executive Officer, The TSi Company
Digital marketing is great. But like omnichannel retail, omni-method marketing packs more punch. It is harder than ever to get a consumer’s attention. Remember the old saying “tell them seven different times in seven different ways.” Well that includes with different formats and media. From the stats above, radio may have been largely forgotten — which is why it might be delivering better-than-average results (fewer competitors using these ads).
What radio needs to do is to tie in with an app and/or offer podcasts or stream its service. One way or another, people still commute. When they do, make sure they hear your message and that it ties to your print ad, which ties to your social campaign, in-store ads and other digital assets.
When I read “lack of visuals” as a concern, I chuckled because anyone who feels that way does not understand the power of radio. I have used radio advertising with clients for years, and radio was and still is a strong medium if used correctly. It is true that radio remains the largest medium today generating millions of listeners with its peak audience still being drive time.
A few things come to mind when using radio as an advertising medium.
Finally, for all those “we need visuals” people out there — remember the best benefit of radio. People imagine what they can’t see, and if you create the right ad with a message that allows the listener to create a visual in their mind, not only does it work, they don’t forget it.
Radio probably is underestimated by some. From a personal perspective, I am more likely to take notice of an advert on the radio (often because I am driving and listening so am not being distracted) than online (where I ignore adverts) or TV (which I don’t watch very often).
Also, radio may not have the benefit of visuals, but the jingles have always been a powerful way of stimulating memory. I mean, who could ever forget the 1-877-Kars4Kids song?
One of the core issues is what defines radio today. Most people think of radio as AM/FM. But now we have opportunities like Pandora/Sirius, Spotify, podcasts and many more. These are opportunities for sure for brands to target their audience because the content becomes quite specific. The targeting and measurement is more specific than the old methods of CPM which was really a guess.
These types of opportunities on the above platforms and others are a resource for many retailers and brands. This medium is going to continue to grow as “radio” becomes integrated into our phones. But more important, the measurement of results has improved so retailers and brands can understand what is working and where it is working.
Radio should definitely be a part of a marketing strategy for certain advertisers, but just a part. So it is being underestimated by some, but it will never regain the popularity it once had. Instead, it should be used as one spoke within a more comprehensive strategy.
Radio is still listened to by many across the different target groups. Especially for retailers with no big pockets this might be a promising strategy. I can provide you two examples from Europe where one of the leading buying groups in electronics has in two countries been extremely successful by mainly targeting on radio ads. In Italy and The Netherlands. Each of them chose the radio station which their target group was listening to. They then made sure that the spot was always played prior or after the news. By continuously repeating day after day, the retailer really got known and popular in both countries. Of course nowadays, digital ads are much more important. And the strategy will differ from retailer to retailer. However, a retailer has to carefully evaluate where to put its resources. This also counts for ad spending.
Radio (and audio in general) is a powerful, cost-effective medium. It’s not popular among creative agencies because it’s perceived as boring and not as “hip” as video production. Radio allows you to tell your brand story and reach many listeners in a very cost-effective manner. Additional audio channels include in-store audio, podcasts and in-app story-telling. Audio is a very powerful sense that triggers many emotional responses and cues. It is not leveraged enough in today’s “digital” landscape.
Radio, specifically Satellite Sirius, as well as non-premium Pandora and Spotify subscriptions are such an underrated and often forgotten advertising medium. There are countless occasions when we are driving or in a middle of an activity, while on the run when an advertising jingle comes on. We may not be consciously aware of it at the time, but the tunes are so catchy that they simply stay in our heads. A great commercial jingle makes an ad memorable.
While advertising is unavoidable on AM and FM platforms, consumers could certainly opt out on advertising on Spotify, etc. According to Scott Galloway, the hottest topic in the media business right now is the unexpected growth in paid subscriptions, where consumers could opt out of advertising.
The challenge in this new subscription paradigm is for firms to offer personalized, non-creepy ads that will engage and not disrupt the consumer.
In a word, yes, they are. Radio is a medium that I place under the category of “as much as things have changed, some things have not changed at all.” Radio can help to create and deliver a personality for a brand and target specific demographics at a relatively low cost. I don’t believe it should be the only medium to use — as it would be foolish to ignore digital, but those that place the entire budget into digital are foolish not to take advantage of placing radio into the mix. Plus, radio will allow people to keep their eye on the road instead of their phones.
Retailers, as well as every other company, are trying to find that perfect media mix but with new technology being released every month it can be difficult. Shoppers have never been so segmented before and with limited ad budgets, grocers need to pick and choose wisely.
If radio want’s to see some of that money they need to create a pitch that competes with the new technologies and clearly outline who their listening demographics are, otherwise the new flashy tech will continue to attract the grocer’s media spend.
The entire marketing training network in the U.S. is turning out young graduates who are deaf to all traditional media — and especially radio.
Universities over-emphasize digital at the expense of other forms and end up turning out business grads who know little about the real media world. Students embrace this because they don’t know better. Professors embrace this because it helps their careers to write and teach about shiny new baubles.
Retailers need to start training programs for incoming marketing teams — to build a more complete understanding of all the media options so they can get more balanced mixes. Retailers also need to pull back on KPI-based programs which often reward the most expensive media just because its results are easily countable.
It is hard to argue with the ROI metrics for radio advertising. While it doesn’t get the media hype that online and social media advertising does, there is still a compelling argument for retailers (for some segments) to include some radio advertising in their marketing mix.
Two-hundred seventy-one million Americans, or 93 percent of the country, tune in every week, according to Nielsen’s Audio Today report. Consumers spend 86 minutes a day listening to broadcast radio, more than twice as much as with all social media, according to eMarketer. Local radio pricing continues to decline, according to MAGNA.
With the ability to micro-target radio placement based on the demographics of each station and localize the message for each market, radio is worth another try!
Radio had been written off by many firms — just like print, but the online replacement was certainly not auditory. Almost 30% of people actually learn best through hearing, although many learn through multiple ways. Radio’s real claim to fame, however, is localization. There are still over 15,000 radio stations in the US, and many have their internet streaming versions available on-demand as well. Radio is able to bring in local news, weather, sports, and add local business influence in advertising that is still a challenge to replicate in other mediums. When folks haven’t downloaded their podcasts in time for their morning commutes, radio is still the standard.
As Brandon stated, satellite radio is proving to be a stellar place for brands, especially digitally natives such as Casper, UNTUCKit, AWAY and Harry’s. These brand first, not retailer first companies understand the power of this medium against the spend and are utilizing it beautifully to help extend their narrative.
While I think it’s probably true that (many) retailers underestimate radio, it’s nonetheless true that radio has real issues: too many ads and a high-concentration of ownership that seems to stifle innovation (how many “talk-radio” or “bro-country” stations does every market need?). Unfortunately radio never had — until recently with the development of online streaming — the equivalent of cable television, which for all its faults was nevertheless able to deliver highly segmented audiences … decades ago.
Radio is an undervalued platform in terms of results, as long as you’re willing to give up the benefits that digital channels provide, such as data, attribution, segmentation and message optimization, etc.