How Much Does Radio Cost?

We hear this question 52 weeks a year. And it deserves a straight answer.

First, consider our credentials to answer such a mystifying question. Since 1993, 100% of our advertising agency’s media billings have been placed in the medium of radio and sound advertising. No ad agency in America is more focused on radio in all of its forms. In our early years, maybe 25% of our new clients’ tests “worked” or were fixable. Today, that success rate hovers around 70-80%.

Next, consider the extreme cases. 100% of the media tests we’ve managed that were funded with budgets of $500,000 or more have succeeded. 100%. Conversely tests with lower budgets, less than $50K, have lower success rates. Why? Two reasons.

Limited budgets limit your options. We insist on testing at least two creative approaches from the dozen-plus script treatments we create for each campaign. With an infinite number of ways to present a compelling offer and ask for an action, it would be criminal to only test one approach.

Next, there’s the issue of media. With SO many radio platforms available to deliver your call-to-action, we strive to test at least six different media channels to ensure that we’ll come away with at least one Creative+Media pairing that works.Testing two creatives on six different types of radio isn’t one test; it’s 12 mini-tests in a controlled testing matrix. An under funded budget bets the whole campaign on one or two options. That’s like calling baseball’s best hitter a loser because you only saw him bat one time when he struck out.

So – what is the magic number for an effective, direct response radio test? $50,000 to $100,000, minimum, over a four-to-six-week period. If you can commit a larger number to a longer test, that increases the odds for success by giving you time to prove what you’ve learned in the first six weeks and then optimizing the campaign into profitability.

Perhaps the toughest thing we have to tell a new client is that their test will probably NOT yield the overall metrics they need to call the test profitable. BUT, it will provide all the intelligence we need to make the campaign profitable from that point forward. Those who “get it” smile and become long-term partners.  Those who don’t run off like Olympic sprinters, only to hear their diligent competitors on the radio, week after week after week.

Choosing the right ad agency is a huge part of the mix. Providing sufficient funding to measure and manage the medium to success is the top secret fuel additive that powers the test.

Just look at direct mail and consider all the variables that get tested and tweaked to create a successful campaign: headline, font, color, envelope size, body copy, offer, list broker. Radio requires the same patient, diligent approach, just with a different set of buzz words and variables.

The rewards, however, sound amazing.

Mark Lipsky is the President and CEO of The Radio Agency. Please follow The Radio Agency’s Blog “Sounding Board” by subscribing to the email or RSS links above. Visit our website TheRadioAgency.com