Radio Advertising

What You Need to Know About Radio Advertising

Why is it advantageous to use radio advertising? There are actually many benefits to be found with radio advertising with your business which is why it has long been such a popular choice when it comes to advertising methods for large and small businesses alike. If you’re looking for ways to enhance your business marketing plan or have already been considering radio advertising, it’s important to learn as much as you can about this chosen method.

What are some advantages to radio advertising?

• high reach
• high targetability
• low cost

These are the main factors that make radio advertising a great choice for your business. Radio advertising can be a main engine of growth and profits for a business, whether new or established. Let’s break down these factors in more detail and really look at why radio advertising works.

High Reach of Radio Advertising

Radio advertising is a great medium when it comes to reach. If an advertising medium doesn’t reach your target customers, it doesn’t provide any benefit. Radio is great because it provides a wide scale appeal to the customers. When it comes to radio, statistics show that listening patterns seem to be pretty stable. Even though there are many options available out there today, when a person finds a station they like, they tend to stick with it.

Radio in general is a stable medium with 13,000 stations broadcasting across the United States. Radio reaches over 94% of the US population (over 12 years old) making it a viable choice for advertising. When choosing radio advertising, there is little question about whether or not you can reach your target audience.

High Targetability of Radio Advertising

The next reason why radio advertising is a great choice is because of the high targetability it has. Advertising is all about reaching the right people at the right time to ultimately make a sale and radio advertising has the targetability to make that happen. You have a better chance of getting more bang for your buck with radio than with TV or print advertising. Radio allows you a more specific target according to your needs.

The radio industry groups into formats according to age and other factors of the listener. As an example, here is a summary of the formats that reach certain demographics:

Age Target Format(s)

Teens 12-17 Primarily CHR, some Urban, Alternative
Adults 18-24 CHR, more Alternative, Urban preference
Adults 25-34 Alternative, Rock, CHR, some Urban, AC
Adults 35-44 Rock, AC primarily
Adults 45-54 Oldies, AC
Adults 55-64 Classical, New AC
Adults 65+ Adult Standards, Classical, News Talk

There is similar data available for other demographics such as sex, race and more. Using this type of information, you can get direct data regarding your target market and what they listen to, helping you know which channels to place your advertisements on for the maximum benefit.

Low Cost of Radio Advertising

When it comes to an advertising campaign, cost is a big factor. Let’s face it, most of us are on tight budgets. We need affordable advertising that brings results. Radio can help you do just that. The lower costs of radio advertising could be one of the best reasons to choose it. Of course, cheap isn’t always good in itself. You need low costs with results but radio does that. It’s one of the oldest and still the most dependable methods of advertising around.

When compared with television, radio wins big on costs with both creative development and media costs. Radio has also proven to be more effective per costs involved than print advertising methods. Further statistics show even more reasons to choose radio advertising for your business marketing.

Trends in radio advertising

Shorter commercials A few years ago, most radio station steered their clients toward 60 second "spots" or commercials. Even if someone wanted a 30 second spot, the station would charge the same price as a 60.

Now many stations have become more flexible. Not only are 30 second spots available, but now stations will sell 20 second or even 10 second or 5 second spots. Some stations are now selling "blinks," which are 2 second spots that quickly mention the name of a company or product.

For instance, the American Idol TV show recently bought a series of "blinks" that contained nothing more than the recognizable "swoosh" sound that has become closely identified with the program. These usually aired at the end of a commercial break just before the station went back to its regular programming.

Station websites have become increasingly important for branding and income. Visitors who come to station websites will see a variety of ads. Most of these ads are "exposure" ads, meaning the client pays simply for having the ads on the site. A visitor does not have to click on an ad for the station to make money.

When to buy radio advertising time

The amount you pay for radio advertising is often negotiable depending on how much "inventory" is available. "Inventory" is another way of saying "airtime that hasn't been sold to advertisers."

Retailers often bust their year-end advertising budgets by buying up large blocks of time during the holiday shopping season. So stations often have a lot of inventory in January.

In February, May and November, the airwaves are often crowded by TV networks promoting their programnming. Therefore, it will be more difficult to drive a good bargain during those months.

It's also hard to get airtime during hotly contested political campaigns because so many candidates are buying up inventory. It's also interesting to not that, by law, political candidates must be given the lowest rates a station offers. So candidates can get more advertising for less money than many other advertisers.

Basic Radio Advertising Terms

Remotes A "remote" is when a station sends a crew, a personality and portable broadcast equipment to an advertiser's location and broadcasts commercials (usually live) from that location.

Rate Card This is a station's officially published advertising rates. It's usually offered in "tiers," from higher prices to lower prices. Advertisers who pay higher prices are guaranteed placement where they want it. Advertisers who select prices in the lower tiers may or may not get the best placement.

Everything's negotiable in radio. Even though the station has a rate card, account executives and advertisers often negotiate deals that include a different pricing structure or non-financial considerations.

Trade or Barter Sometimes a station will trade airtime in return for goods or services. Those goods or services may then be used for the benefit of the station or station employees.

Buying a block of time Stations will often sell 30 or 60 minutes of airtime to companies or individuals and allow those individuals to sell advertising or secure barter on their own. These shows often run on weekends. Some radio in siders refer to Saturday morning as "how-to-heaven" because many advertisers choose to do shows of this sort on Saturday morning.

Billboards Brief 5-10 second commercials that often include a tagline like "This portion of (program) is brought to you by (advertiser)." The billboard may also include a quick USP or promotional reminder of some sort.

Radio Advertising Research

Audience research, which often determines the prices on the "rate card" (see above) is done by a company called Arbitron. Arbitron hires a number of listeners in an ADI (area of dominant influence) to keep a diary of their listening habits.

There are two disadvantages to the diary method:

1) If a listener doesn't like a certain personality or station, that listener is not likely to write down the station's call letters in the diary even if he/she actually listened to the station during the rating period.

2) Listeners often procrastinate when filling in their diaries, and when they finally do sit doiwn to fill them in, they don;t always do it accurately.

Arbitron hopes to make more widespread use of the Portable People Meter in the future. The Portable People Meter, which some people mistakenly call the "Personal People Meter" or PPM, is an electronic research device which measures the number of people listening to individual broadcast media. The PPM is worn like a pager, and and it works by detecting and logging hidden audio tones being broadcast by a station or cable network.

Arbitron also has research services for TV, but it's best known for its service to radio.

Arbitron makes its money by selling its research results to stations. Without this research, it would be almost impossible for stations to know how they're doing, and for advertisers to make effective judgments about the markets and audiences the stations reach.