Every good marketer knows you need a clear target – and specific, measurable goals – to craft an effective advertising message and manage an accountable media buy.
The same holds true in budgeting a first-time radio campaign. Risks must be minimized and care taken not to underspend or overspend. An underfunded campaign could pull the plug days before that magic fourth or fifth advertising impression is made to motivate listeners to take action. And an overfunded campaign could waste thousands or millions, chasing sales that might not ever be realized.
So what’s the magic number? Let’s start with the easy part: Creative & Production. Some radio stations give away these services for free. And short of warning “you get what you pay for,” just know that your best, most effective creative may not come from an in-house production team grinding out dozens of commercials every week for a full staff of sales reps. When I was 23 years old, I worked for a top-rated AM/FM combo in a Top Five market, writing and producing hundreds of commercials for products and services I knew nothing about, using the same station voices to play “credible expert” and “guy/gal next door” on spot after spot after spot. At the other extreme, some agencies and producers charge $10,000 and up for a single commercial. And a full-blown original music jingle or celebrity voice talent could cost you many times that. For middle-ground perspective, I’ll tell you that The Radio Agency charges $5,500 for a round of creative, which includes the talents and services of five, professional radio copywriters (for multiple styles and perspectives), script editors, voice talent, studio time, talent direction, producer, audio editing, music and sound effects licensing and mastering alternate versions if unique numbers, URLs or promo codes are being used to track response.
Answering the budget question gets a bit trickier on the Media side. The more advertising impressions you buy, the higher the cost of media. So a campaign in Portland, Maine will cost far less than a campaign in Portland, Oregon, a city with nearly 10 times the population. A good place to start is determining which radio advertising platforms make the most sense for you.
AM/FM, despite slowly-eroding listener share, is still the 800 lb. gorilla in the broadcast booth. AM/FM is a must for local campaigns and national networks and syndicated shows can generate massive reach. SiriusXM is a “must consider” for national campaigns, especially for B2B advertisers or a target audience of 35+ plus (the dominant audience for SXM’s spoken word channels which accept advertising). But because SiriusXM is a one-satellite-to-48-states (plus the lower tier of Canada) delivery system, SXM makes no sense for a local campaign. The same holds true for Podcasts. While there are some local podcasts and national podcast properties that can be purchased in a single market, virtually all podcast advertising is placed to reach a national audience. Finally, Streaming Audio (notably Pandora and Spotify) can be a healthy part of a local or national buy, especially if you wish to target just one gender or a very specific age range. For example, a Women 25-49 buy can be placed without wasting a single advertising impression on Men – or Women under 25 or over 49.
Plan for a minimum four-week campaign, to enable a two-week test of different creative messages. For example, airing two weeks of authoritarian, straight-read announcer versus two weeks of the guy/gal next door giving friendly advice, will likely reveal that one approach works better than the other, allowing you to optimize your creative efficiency going forward.
For a national campaign, plan on $50,000 to $150,000 to cover a 4-6 week media campaign. This allows you to buy 4-6 different types of media and test two different messages, meaning that you’re actually running 8-12 “mini tests” rather than just one test of radio. If just one of those mini tests works, your successful media buy is scale-able, coast to coast.
Locally, a four-week buy in Portland, Maine might cost $10,600…while a four-week buy in Portland, Oregon might cost $36,400. In a major market like Chicago, that same audience penetration might require $120,600. (These are ballpark costs, projected against Adults 25-54, 200 GRPs over four weeks. Let us know your target audience and markets and we’ll provide you with a reliable estimate.)
Budget at least $10,000/week for a SiriusXM buy, to take advantage of the added value exposure they offer. For Podcasts, test the low end ($300-$1,000 per show), midrange ($1,000-$5,000) and upper end ($5,000+) properties that match up with your target audience. For Streaming Audio, budget a minimum of $15K-$35K to leverage the best opportunities in digital audio streaming.
Here at The Radio Agency, we subscribe to Nielsen Audio Research for all 265 U.S. radio markets, as well as proprietary research and planning tools that enable us to assemble intelligent and reliable planning estimates for any type of radio buy. Please don’t hesitate to get in touch, if we can help you make a better informed decision on the best ways to leverage the marketing assets of radio to help your brand succeed on radio.
CEO & Creative Director of The Radio Agency, a national advertising agency 100% focused on creating and managing sound advertising campaigns through the medium of radio. You can reach Mark at Mark@TheRadioAgency.com.