If advertisers are looking for a meaningful return on their advertising investment, they should look no further than traditional radio. That’s the main takeaway from a new blog post by Pierre Bouvard, chief insights officer for Cumulus/Westwood One.
AM/FM radio is a smart way to boost customers amid rising paid search costs, outperforming social, short-form digital and search, according to Neustar, as cited by Bouvard. A study from Accenture also finds that reducing traditional media causes search and social ROI to drop. “AM/FM radio solves search’s price inflation crisis by driving powerful ROI and growth in customers,” he concludes.
Case in point: Nielsen found that a radio campaign for an auto aftermarket retailer resulted in a 48% increase in buyers, a 71% growth in market share, and for every dollar of radio advertising, the retailer generated $21 in sales. The same study found that the AM/FM radio campaign generated a 64% increase in new customers. “AM/FM radio advertising is a new customer machine,” he writes.
Meanwhile, allocating 20% of a digital budget to AM/FM radio results in a 29% increase in campaign reach and greater brand impact, according to Nielsen Research. A $2 million digital campaign generates 45% reach. And redistributing $400,000 (20%) of the digital budget to AM/FM radio increases total campaign reach from 45% to 58%. This reach growth creates improvement in brand awareness, consideration, purchase and brand advocacy.
Compare the advantages of radio with paid search costs, which Bouvard says “are exploding.” A just released MoffettNathanson report on the online travel industry reveals marketing costs (as a percentage of revenue) are up 26% for Expedia, 17% for Priceline and 95% for TripAdvisor. As search costs continue to rise, he says, “AM/FM radio remains a stable and effective alternative for advertisers looking to make an impact.”