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- You can reach most people using radio as a medium. To be precise, around 77% of adults tune in to an advertising supported AM/FM station. The average listener, spends almost 2 hours (109) minutes per day listening to AM /FM radio. Source: Nielsen Report
- You can reach people when they are driving to do shopping. Peak radio usage coincides with when people are driving to work, lunch time and leaving work. Listening is much lower between 8:00 PM and 8:00 AM than during daytime hours. (Nielsen Report)
- You can target your advertising very effectively. In the United States, there are over 11,000 commercial radio stations. While there are 50,000 Watt stations which reach large geographic areas. Many stations reach relatively focused geographic areas. By picking the right station, you won’t be reaching people that aren’t potential customers. Furthermore, certain formats (talk, country, pop, easy listening) tend to reach specific demographics, enabling advertiser to target the types of customers that shop with them directly.
What are the challenges with radio advertising?
- They are listening to the radio and doing something else. When listening to the radio, the listener may be driving a car, doing dishes or talking to friends. Often radio is not the primary focus of their attention. This makes communicating information like a phone number very difficult.
- To reach the entire audience of a radio station requires more spots than television. Television is sometimes called appointment viewing. Viewers generally have the intention of watching an entire show from beginning to end. On the other hand, radio listeners can tune in and out at different intervals. For example, two people that listen to the same show while driving to work, may never listen at the same time. Thus, a small business advertiser will have to advertise more often to reach everyone listening.
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Should you advertise on radio?
Retail stores and restaurants can use radio ads very effectively . You can reach a potential customer when they are on their way to go shopping or thinking about where to eat that night. In short, radio can be very effective at driving traffic (pun intended) to your business.
If you are currently already advertising on other mediums, such as television or newspaper, radio can be a very powerful one-two punch. The potential customer hears a television commercial at night and in the afternoon, and in the morning a radio ad reminds them about your business.
However, if you have a complex message or the benefits of your offering are not easy to describe with words in a compelling way, radio may not be the best medium for you.
Where should you advertise?
With over 10,000 stations, you may not know all the stations that are located in your area. Radio Locator allows you to find stations by the zip codes in which their signal can be heard. Narrow this list down to stations that primarily serve the region which you are interested in.
You should contact the radio stations to find out which demographics they serve. For example, generally speaking men listen to talk radio formats (in which sports and politics are the primary topics) much more than women. Here are some general guidelines for targeting based on age from the direct response radio advertising agency, strategicmedia.
Primarily Top 40, some Urban, Alternative
Top 40, more Alternative, Urban preference
Alternative, Rock, Top, some Urban, Adult Contemporary
Rock, Adult Contemporary primarily
Oldies, Adult Contemporary
Classical, New Adult Contemporary
Adult Standards, Classical, News Talk
However, these are generalities and your local station will be able to give you the specifics of their audience based on data from Arbitron or Eastlan ratings. Once you have data from the radio stations, figure out which stations have an audience which matches up with the customer base of your business. Asking your customers which stations they listen to can also very helpful.
Picking Time Of Day (weekdays)
Radio ads are generally sold by daypart:
- 6 AM – 10 AM also known as Morning Drive or AM Drive – Considered to be one of the two most desirable time slots for radio advertisers because of the high engagement of listeners.
- 10 AM – 3 PM also known as Midday – Many talk stations tend to lose audience during this period, however, the shows of major talk personalities such “Rush Limbaugh” are located in this daypart as well. Some music stations gain audience as listeners use radio for background noise during work. During this period, the percentage of women listening tends to increase.
- 3 PM – 7 PM also known as Afternoon Drive or PM Drive – A coveted time for advertising. Food and entertainment advertisers tend to seek this time out for advertising.
- 7 PM – 12 AM also known as Evening – Listeners are thought to be less responsive to radio ads during this time frame. With the exception of 7 PM – 8 PM, the audience tends to be much smaller than the daytime. However, there is an opportunity to get “bargain” rates.
- 12 AM – 6 AM also known as Overnight – Considered the worst time to advertise. Unless you’re running a 24 hour diner or some other business that caters to people that work at night, this time period should generally be avoided.
Weekend advertising is considered its own timeslot. Weekend audiences tend to be much smaller than weekday audiences during similar time periods.
The information on time slots above comes from Bid4Spots’ Radio Daypart Descriptions.
Should you buy Run Of Station?
Run of station allows the radio statio to place you in any time slot that they want. The cost per ad spot, for each time your ad runs, can be very, very low in terms of dollar costs. However, this may not be a bargain! Often times, this will result in your ads running in the evening or overnight time slots where the audience is small and less responsive.
Radio Advertisements Are Typically Sold in 60 Second Spots
Traditionally, radio spots are sold and priced based on 60 second commercial spots. However, you can buy 30 second or even 10 second spots (called billboards). Unlike television, a 30 second commercial doesn’t necessarily cost half as much as a 60 second commercial. For example, a 30 second commercial might be priced at 80% of the rate of a 60 second spot. This is because radio listeners tend to get less annoyed by the amount of time which commercial messages take than the number of different commercials that are aired. (Here is good video explanation by Dan O’Day)
There is a study that indicates that 60 second commercials are more effective than 30 second commercials. The longer commercial gives the advertiser an opportunity to tell a story and repeat their brand name and call to action more often.
Our suggestion: Go with the 60 second commercial.
How To Choose A Schedule for Your Radio Ad
In a choosing a schedule, an advertiser must decide between reaching the most people (reach) and the number of times each person listening will hear the commercial (frequency). There is an excellent article on this topic by the Portland Radio Group, The Radio Advertiser’s Toughest Choice: Reach Versus Frequency.
I am going to sidestep this entire discussion. If you are new to radio advertising, the biggest question which you want to find out the answer to is “Does this work?” and if so, “What shows (daypart) are working?”
You want to run enough radio ads for your business that you will see noticeable results if it works. The problem with running a broad schedule, meaning commercials on multiple dayparts, is that you might not be able to tell if the campaign is producing good results. There may be an increase in business, but not enough to tell if its from your radio ads or just a normal fluctuation in sales. By focusing your advertising in one daypart and advertising with good frequency (for example three spots per day Monday through Friday) you should be able to tell if this type of advertising is working for your business. The risk of course of this strategy is that you might accidentally pick a daypart which doesn’t work for your business and get a misleading reading as to effectiveness as a result.
Suggestion: Pick the daypart that will be most effective for your business, and try a schedule of 3 ads per day, Monday through Friday.
How much does radio advertising cost on average?
While the answer depends on many factors, the primary one is how many people will be listening. Below are ballpark figures for weekly advertising costs, based on advertising with a top performing radio station using a schedule that includes 15 Monday – Friday spots and 4 weekend spots. Estimates are taken from the article How Much Does Radio Advertising Cost? from localmarketingideas.com.
- New York City, Los Angeles, Chicago: from $4000 to $8000
- Dallas/Ft.Worth, Houston, Phoenix, San Diego: from $2000 to $5000
- Denver, Cleveland, Kansas City: from $1000 to $3000
- Akron, Wichita, Baton Rouge: from $800 to $2000
- Myrtle Beach SC, Green Bay, Topeka: from $500 to $1500
What is the thinking behind the pricing?
There are many fancy words and terms that are used when discussing radio advertising. You may hear terms like Gross Rating Point (GRP), Cost Per Point (CPP), Average Quarter Hour Rating (AQR rating) and many others. There are some clear, concise definitions here.
However, pricing comes down to the following equation:
Number Of People Listening x Cost To Reach 1,000 listeners (CPM) = Cost of Advertising Per Spot
Number Of people listening in my opinion is best measured by Average Quarterly Hour Person (AQH Persons). The radio station can provide this data from Arbitron for the daypart you’re interested in. The CPM rate can vary greatly from station to station, and market to market. The average daytime CPM rate is typically in the $12 – $16 range for adults between 18 – 49. If the audience that listens to the broadcast tends to be older than 50, a CPM of $8 – $12 is reasonable for daytime. Evening and particularly overnight should be lower.
Cost Of Producing Radio Advertising Spots
Often, a radio station will offer to create a spot for free. These spots can range in quality from poor to excellent depending on the people working on the spot. When a station creates a spot for you, you can only run that spot on their channel(s). If a radio station offers to create a free spot, I would suggest you take advantage of the offer as it will give you more options.
When negotiating your advertising deal with the radio station, find out if live reads of ads are available. Instead of playing a pre-recorded commercial, the host or disc jockey will read from a script. This option has several benefits:
- Listeners tend to tune out commercials. As the host is reading, that response is less likely to occur.
- The DJ / host will often add lib a bit with the commercial, taking more than the 60 seconds that you bought.
- Live reads often provide credibility to a product, implying that the host endorses the product. If you go with the live read, provide the on-air personalities with a free product and/or service so that they can speak from personal experience.
If you are going with a produced commercial, I would use a professional radio commercial production company and make at least two commercials. They can help you with the script, selecting a voice, music, recording and effects. Have them produce two different ad spots so that you will be able to test the effectiveness of different messaging / approaches. You should be able to get a great radio ad made for around $800 to $1200 per commercial. For a more detailed explanation of what radio advertising costs you can also see our radio advertising costs article.
The Elements of a Good Radio Script
I found a number of good articles on what makes a good radio script which I will post below. However, I want to make a point that is sometimes not explicitly stated.
Radio listeners will not be listening to your advertisement in same way that you will. When you listen to your radio commercial to give your approval for it to be used, it will be in a quiet place with your entire focus on the radio ad. However, the audience for the commercial may only be partially listening to it or may hear only part of the radio advertisement. Additionally, real listeners will likely also be engaged in another activity, which means that you cannot ask them to use their brain to think about your content.
This has two important implications:
- Anything that is important, you need to repeat several times throughout the advertisement.
- If you want the listener to remember anything specific, like a promo code or phone number, you need to make it very easy. For phone numbers for example, a vanity number will work best.
Here are some other great resources for creating radio ads.
StrategicMedia: The Top Ten Keys To Creating Great Radio Ads
Michael Holmes: Radio Commercials: Tips, Tricks and Tutorials
The Radio Advertising Bureau: A representative of the RAB was interviewed for this article and provided helpful information.
That’s our article for today. If you have any questions or comments please leave them in the comments section below. Also be sure to read the next article in our offline marketing series, where we discuss newspaper advertising.
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