Health care CEO admits he under-estimated radio.
Gentiva Health Services CEO Tony Strange is probably not a lot different than other executives in corporate America. In an increasingly digital world, he doubted radio’s ability to connect with potential customers. But after he saw how well radio worked for Gentiva’s business, radio’s likely to pull some dollars away from television.
“When we first started this process, I wasn’t so convinced about the radio advertising, and I’m proud to say that I was wrong,” Strange said. He told investors last week that they’ve been testing how to approach advertising and rolled out commercials in four Southeastern markets so far this year. Strange said they’re using a “learn as we go” approach and so far have been splitting the budget 50-50 between radio and TV. “I think our radio advertising is having an equal impact, if not even a better impact than television,” he said. Gentiva plans to begin advertising in another half dozen markets by the end of the year, and Strange said they’ll closely monitor the return on investment in both media. “We’ll probably stay kind of in the 50-50 range until we learn that one works better than the other, then we’ll go all in,” he said.
Radio may have a leg up in the race since Gentiva is cost-sensitive — Strange said they’re even going to avoid some markets for now because it is too “cost prohibitive to advertise.” Gentiva currently has 265 health centers in 30 states. “The ads are primarily focused on building awareness and providing solutions for hospice caregivers that are struggling to take care of their loved ones,” Strange said.
The health care category is one that radio executives have high long-term hopes for, and companies such as Kaiser Permanente and A Place For Mom have been among the biggest advertisers so far this year. Spending may also increase as the Affordable Care Act, or Obamacare, takes effect in 2014.