Luckily, we here at The Radio Agency aren’t too sensitive. That’s why we didn’t take offense to the study we read recently proclaiming that, “strangely enough,” radio scored the highest ROI – sales to media spend – versus digital and TV for 10 consumer brands tracked in the study.
Nielsen Catalina Solutions tracked the radio listening habits of 14,000 households with the PPM (Portable People Meter) and then recorded their retail purchases. Although the study was sponsored by Clear Channel, and it seems only Clear Channel stations were measured, Clear Channel said, “we didn’t touch the data.” They let Nielsen Catalina handle all of the analysis.
According to this study, “brands averaged a sales lift of more than $6 for every $1 spent on radio ads – an ROI double of that of even the best results from many recent studies of digital or TV media.” While part of the high ROI could be due to the cost effectiveness of radio, Leslie Wood, Chief Research Officer at Nielsen Catalina said, “I have never seen such consistent delivery against advertising metrics and this kind of massive return on investments.”
What made me chuckle was the surprise of those involved when radio came out on top. Having been at The Radio Agency 14 years, I know for a fact that radio can work for brands in many categories – more than the six categories that covered the 10 brands in this study (snacks, retail, beer, breakfast bar, soft drink and candy). And, it’s not just great for driving retail. Radio can be used effectively to drive to web and to call centers as well. We’ve got plenty of clients that will attest to that.
Radio is personal. It’s portable. And, I agree with Leslie Wood – many agencies and brand leaders who live and work in New York (and, therefore don’t drive or listen to the radio during their work commute) don’t realize the connection that people have to their favorite radio stations and personalities. That’s why spending on radio is “so small that results barely register in the econometric marketing-mix analyses many marketers use to measure ROI.”
One of the simplest conclusions to draw from this study is that not just Clear Channel stations are able to generate results like this. Stations with similar formats in the same markets are likely to yield the same ROI. Even better, their rates may be lower. Perhaps another radio group will step up and conduct its own study!
Read the article about the study here: Radio Delivers Best ROI
Barbra Tabnick is Vice President, Account Services at The Radio Agency. Please follow The Radio Agency’s Blog “Sounding Board” by subscribing to the RSS link above. Visit our website TheRadioAgency.com