Radio Advertising & Radio Ads: The Small Business Guide
Radio advertising is a tried and tested marketing channel for businesses looking to promote a message to a wide regional audience. In a 30- to a 60-second radio commercial, businesses can say more than an online text-based ad with limited reach. In this article, we explore the advantages of radio advertising, when and how to run them, and if radio ads are suitable for your business.
Pros & Cons of Radio Advertising
Like every advertising medium, there are pros and cons to advertising on the radio. For example, while radio ads can reach a wide audience within a particular geographical area, people aren’t tuning in to listen to the radio for ads, so there is a lack of search intent. As such, people may switch stations or simply tune out if your ad doesn’t grab their attention.
|Reach a large audience||Minimal buying intent|
|Target by geographical area||No guarantee listeners will fit your target profile|
|Opportunity to target by interest during niche radio shows, or genres||Radio listeners are frequently tuning in and out|
|Capture the attention of a working audience by advertising during standard commuting hours||Limited performance tracking compared to alternative advertising channels|
Is Radio Advertising Right for Your Business?
Radio advertising isn’t for every business. It works best for those with a broad, regionally based target audience or brands aspiring to be nationally known. It can also be a good option for those selling high-ticket consumer goods or services. Most importantly, radio advertising is an excellent option for those whose primary goal is to grow awareness of a newly launched startup business—provided you have a strong marketing message.
Before investing money into radio ads, consider who your audience is, whether they’re listening to the radio, and what your ad would need to say to resonate with them. If your business is in a niche market, radio ads probably won’t be a good use of your ad budget. You also need the funds available to create and deploy your radio ad as they have steeper upfront fees than other types of advertising (like online search or display ads).
Types of Businesses Radio Ads Work Best For
- Businesses with a marketing message that can resonate with a wide audience
- Brands with a compelling story or angle
- Startups wanting to build brand awareness within a region
- Businesses that can allot a substantial advertising budget
- Companies that don’t need to see an immediate return on investment (as building brand and offer awareness with radio ads can take time)
For example, if you’re a distributor of vegan food products, it is not advisable to do radio ads since only 7% of Americans identify as vegan. In other words, unless your goal is to convert carnivores, you’re already starting with a tiny percentage of the audience that will have an interest in your business or brand.
On the other hand, if you’re opening a new restaurant, radio advertising can be a great way to get the word out about what sets your restaurant apart from the rest. You can tailor ads to run before your grand opening to help fill seats, generate attendance at a soft opening, and build brand awareness and buzz about your menu.
Best Times to Run Radio Advertisements
Radio stations split up ad times into different parts of the day. You probably won’t be surprised to know that the most popular times to run advertisements on the radio are during the morning and evening commutes. Conversely, the evening (7 p.m. to midnight and midnight to 6 a.m.) offers the lowest listenership. While they may be better budget-wise, they will also provide the least reach for your radio ads.
You can choose to have your ads shown exclusively in a certain day spot, or have an equal distribution of your ads throughout the day. We suggest you go with the first option since ads are usually more effective when the same people hear your ad multiple times. It’s easier to achieve this when you run your commercial at the same time every day.
3 Ways to Create Radio Ads
There are a few different options for creating a radio ad to promote your small business. While you could create an ad yourself, you can ensure quality ads by having them produced. It’s not uncommon for radio stations to create the ad for you, but you can also maintain more control by hiring a professional production company, or even a freelance producer.
Here are three common ways radio ads are created:
- Have the station create the ad for you: Sometimes, the station will offer to make your ad at no cost. These spots can range in quality from poor to excellent, depending on the people working on the spot. Options can include professional production but may also simply consist of a radio show host reading your copy. If you go with this option, make sure you are not obligated to use the ad if it is not up to your expectations.
- Hire a professional production company: From scriptwriting and selecting a voice to recording and adding effects, a professional production company is your best bet when producing quality and effective radio ads. In general, expect to pay around $800 to $1,200 per commercial.
- Hire a freelancer: If you already have a script, you can hire a freelance voice actor through platforms like Fiverr to record the commercial. You can find professional actors for as little as $5, but look at the reviews first to see which actors are likely to perform the best.
What about creating the radio ad yourself? Unless you have experience with voice-over acting, you probably want to steer clear of this option. Conveying a message solely through sound is a difficult task, and in most cases, should be handled by a professional.
Radio Advertising Costs
Radio advertising consists of two primary costs: production and distribution. The distribution costs are the most expensive and can range from $200 to $5,000 per week, depending on your location and chosen station. The cost of producing the commercial, including copywriting, voice talent, and audio/visual editing, typically comes to around $300 to $1,000.
Factors Impacting Ad Costs
Number of people listening to your ad
The main factor affecting cost is the number of people who will be listening to your ad. Costs are often based on cost per mille (CPM), or thousand, such as the average CPM for radio ads. Therefore, spots during the morning and evening commute will cost more than spots late at night. Likewise, playing an ad in a big city will cost more than an ad spot in a small town.
Demographic of the radio station’s audience
Radio stations that have an audience between the ages of 24 to 54 will also have higher prices. That’s because this age group has the highest purchasing power, and therefore many businesses want to advertise to them. You can also expect to pay more for stations that attract a wealthy audience, such as a jazz or classical station.
Demand for an ad spot among advertisers
A radio advertising spot is not guaranteed and usually goes to the highest bidder. Therefore, your ads may be knocked off the air if you don’t match the astronomical rates that occur during an election. The same may happen during major shopping times, such as around Thanksgiving and before Christmas, where more advertisers may buy up airtime to promote upcoming sales.
Special events & occurrences
Radio ad costs may change depending on events around town. This is because prices fluctuate depending on how many want to advertise during that time. For example, if there is a highly contested local, state, or national election, campaigns tend to pour money into local radio and TV at elevated rates.
For more information on radio ad cost, view our in-depth guide to radio advertising costs.
How to Measure Radio Ad Performance
Measuring whether your offline marketing efforts like radio advertising are successful is more difficult than measuring online efforts. However, you can employ a few tactics, such as using a vanity web address or phone number, keeping track of sales post-radio ads, and asking new customers how they found your business.
Here are some of the best ways to measure the performance of your radio ads:
- Get a vanity URL: Looking to drive traffic to your site with your radio ad? Get a vanity URL from a company like Google Domains for $12 to $15 and redirect it to a dedicated landing page for your ad. This way, you’ll be able to track the amount of traffic generated by the ad.
- Use a call tracking or vanity number: Get a phone number different from your everyday number with a provider like Grasshopper. This way, you’ll know if someone is calling your business using your radio ad’s tracking or vanity number. Learn more about this option in our list of the best vanity number providers.
- Ask your customers: Every time a new customer contacts your business, make it a standard practice to ask how they heard about you and track responses.
- Track sales: The easiest way to see if your ads are working is to see if your sales have gone up over the time that your ad was running. While you can’t accurately attribute changes in sales to your radio ad, it can serve as a general indicator, especially if no other major marketing campaigns were launched during the same period.
It’s also worth discussing how you can measure radio ad effectiveness with your chosen radio station. Stations are well-versed in working with advertisers, as they are one of their primary sources of funding. That means they have a stake in helping advertisers understand if ads are working and may be able to further help you come up with ways to track ad performance.
Here are some of the key performance indicators (KPIs) you can use to measure ad performance, including the radio terminology you’ll need to know:
Average Quarter Hour Rating (AQH Rating)
The average number of people listening to a station for at least 5 minutes during a 15-minute timeline
Cost per Thousand (CPM)
The calculated cost to reach 1,000 listeners
Gross Rating Point (GRP)
This is one measure of the impact of your ad (it is equal to the percentage of the target market your ad reaches multiplied by the frequency with which they hear your ad)
Cost per Point (CPP)
The cost to reach AQH equivalent to 1% of a demographic
The number of people a station can reach in a certain time frame
Total number of people who listen to a radio for at least 5 minutes
Total number of people who listen to only one radio station
The percentage of total listeners for a station divided by the total population in an area
The percentage of people in an area who listen to a specific station
Best Alternatives to Radio Advertising
Radio advertising can be one part of your overall marketing mix, but it shouldn’t be the only advertising channel to promote your business. In addition to, or in lieu of, radio advertising, consider other channels such as music streaming ads, television advertising, YouTube ads, pay-per-click (PPC) advertising, billboard ads, and newspaper ads.
Here are some of the best alternatives to radio advertising:
- Music streaming ads: On-demand music streaming services like Pandora and Spotify are growing in popularity, and like radio, offer voice-based advertising with 15- to 30-second spots with an active user base that spans cities and states. Pricing is similar, with the average CPM ranging from $5 to $30.
- TV advertising: Sometimes a marketing message is best suited for show instead of tell. In this case, TV ads can be a good alternative to radio advertising. Learn more about television advertising to determine if it’s right for your business.
- YouTube Ads: Similar to TV ads, YouTube ads give businesses a more affordable way to use video advertising campaigns. Unlike TV commercials, with YouTube ads you pay per view or action, rather than one flat fee to get air time, making it much more affordable for businesses with smaller budgets.
- PPC advertising: Businesses with more niche products or services may find that better use of ad spend is on PPC search ads, such as Google Ads. PPC ads display in search results. What’s great about PPC is that it enables you to connect with people actively searching for what they offer. Learn more about how to advertise on Google.
- Billboard advertising: Interested in reaching a wide audience within a certain area? Consider billboard ads. They’re generally more affordable than radio ads and have a similar audience. The key difference is whether using a photo-based ad or a voice-based ad is better for your marketing message. Get more info on billboard advertising.
- Newspaper advertising: Last but not least, another good alternative to radio ads are newspaper ads. Typically, you can expect newspaper ads to be more affordable than radio ads, and they come with the added benefit of getting people’s full attention as people sit down to read a newspaper. Learn more about newspaper advertising.
In addition to the above marketing channels, every small business should establish a solid online brand presence with a high-quality website. This will help your business get found online organically (aka for free) and will help make a great first impression. With a professional website, you can use many effective website marketing strategies to promote and build your business.
Insightful Radio Advertising Statistics for Small Businesses
Radio advertising statistics show that not only is this a valid marketing idea for small businesses today, but it’s an effective way to drive web traffic and build brand awareness. Here are several radio ad stats that make the case:
- According to a report from the Out of Home Advertising Association of America (OAAA) and Comscore, around 23% of U.S. consumers have used a search engine to look up information about a business after hearing a radio ad.
- Nielsen Catalina Solutions reported that every $1 spent on radio advertising returns $12 in purchase activity. This solidifies radio as a powerful advertising channel that can deliver an approximately 12-to-1 ratio of return on investment.
- Approximately 40% of the time, radio is the channel of choice for Americans when listening to audio content.
- Adults spend an average of 1 hour and 39 minutes listening to the radio every day, and when that time is spent in the car, the audience is captive.
- Statistics show that 25% of individuals become more interested in specific brands because of their radio ads. This interest is described as an inclination to purchase the product or service provided by the brand.
- According to a study by Advameg Inc., over 575 million radios are being used in the U.S. There are 896 million more sources to listen to the radio in the United States alone because of cellphones and other devices.
Frequently Asked Questions (FAQs)
Does radio advertising work for small businesses?
Radio ads can be an effective advertising channel for small businesses since they can easily drive up brand awareness and new customers with their wide reach. Local radio stations provide an opportunity for targeting and affordability for mass advertisement. Radio ads can be effective if your marketing message can apply to a broad demographic.
How do I find the best radio stations to advertise on?
One of the first steps to radio advertising is deciding what station(s) you want your ad to run on. You can reach out directly to local stations for advertising rates and audience information. If you don’t already have stations in mind, use Radio Locator to see the stations that are located in your area and the type of genre they play.
How long are radio ads?
Most radio ads range between 30 and 60 seconds in length. This means that advertisers should use radio ads to focus on a central idea and a singular call to action, all while making the actual ad compelling for listeners to tune in.
Despite the proliferation of on-demand services, radio is still a compelling medium to add to your marketing mix to capture a wide audience. With an adequate marketing budget and the information detailed in this post, you can use radio to effectively boost your marketing strategy and bring in more business.
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