Radio Advertising: 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 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 advertising on radio, when and how to run them, and if they’re 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 they 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.

Is Radio Advertising Right for Your Business?

Ads on radio work best for those with a broad, regionally based target audience or brands aspiring to be known nationally. It can also be a good option for those selling high-ticket consumer goods or services. It’s also an excellent option for growing brand awareness for a newly launched startup business—provided you have a strong marketing message.

Before investing money into radio, 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, an ad on the radio 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

Like any other advertising medium, radio ads will work better for some types of businesses than others. Here are some of the characteristics that might make this medium a good fit for your brand:

• Businesses with a marketing message that resonates 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 (building a brand and offering awareness with radio ads take time)

For example, if you’re a distributor of vegan food products, radio probably wouldn’t be the best medium for you since only 5% 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 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 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 to create your ad:

• 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’re struggling with how to write a radio ad or have a script but need voice actors, try Fiverr. You can find professional writers or actors for as little as $5, but look at the reviews first to see which actors are likely to perform the best. To learn more or get help, visit Fiverr.

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.

Types of Radio Ads

While there are no strict rules to the types of radio ads you can create, there are a few tried-and-true formats that work best for the platform. Because of its format, ads that utilize good sound, music, and voice are often the most effective—no surprise there. To help you get started on how to advertise on the radio, here are some of the most common types of ads you can create on the radio:

• Jingles: If you’ve ever recalled a radio ad from memory, chances are it was probably a jingle. Jingles are prerecorded and are one of the oldest forms of the method because they’re catchy and lighthearted—getting the messages across easily. People are more likely to remember a jingle, which leads to better brand recognition.
• Live reads: One of the most impactful radio ad types, live reads are scripted advertisements read live by hosts or DJs of a certain show. They’re effective because they instantly transfer the host’s credibility to your ad, and they’re usually best for more serious or technical businesses.
• Testimonials: Few things are more impactful than hearing a fellow customer’s voice saying positive things about a brand’s product or service. Testimonial ads utilize a snippet of a customer’s spoken testimonial, and can be followed by a short stinger outro and lend a more human voice to your ad. They’re also a prerecorded type of radio ad.
• Sponsorships: Radio consists of live shows, which means they also accept show sponsorships. In exchange for sponsoring a live show, your brand will usually be mentioned by the show’s hosts at regular points throughout the program (“This show was sponsored by…”). They differ from other ads in that they’re incorporated into the show, so you’ll also have a more captive audience.
• Narrative commercials: Like with TV, radio is an effective medium for storytelling. Narrative commercials (also known as “personified commercials”) are another popular type of prerecorded commercial. They follow a script and usually combine voice actors performing dialog, voice-overs, background music, and sound effects—similar to a TV commercial, but without the video.

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 costs around $300 to $1,000.

Factors Impacting Ad Costs

• Number of people listening: 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.
• Audience demographics: Radio stations with an audience between the ages of 24 and 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 ad spots: 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, when more advertisers may buy up airtime to promote upcoming sales.
• Special events and 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.

How to Measure Radio Ads 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 ad, 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 domain registrar 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 phone number: Get a phone number different from your everyday number. 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: An obvious way to see if your ads are working is to see if your sales increased when 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:

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.

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 to 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, however, 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.
• Pay-per-click (PPC ads): Businesses with more niche products or services may find that the 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.
• Billboards: Interested in reaching a wide audience within a certain area? Consider billboard ads. They’re generally more affordable than radio 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.
• Paid social: One of the most prominent and cost-effective platforms to advertise on today, social media allows for more personal, authentic connections with customers, and is a great way to build brand awareness and garner engagement. Learn more about how social media advertising works and which would be the best paid social platforms to advertise on.
• Newspaper ads: 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, 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.

Insightful Radio Advertising Statistics for Small Businesses

Radio advertising statistics show that not only is it 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.
• Studies found that radio ads achieve an average return of $9.9 for every dollar spent—including ads across various industries, from retail to food and drink, and more. This solidifies radio as a powerful advertising channel that can deliver a nearly 10:1 ratio of return on investment.
• Approximately 40% of the time, radio is the channel of choice for Americans when listening to audio content.
• Radio makes up 39% of all audio Americans listen to—higher than any other, including YouTube audio, streaming services, and audiobooks.
• Statistics show that radio can increase brand awareness by up to 50% and brand trust by up to 31%.
• The audience share of ad-supported radio is 58% higher than that of podcasts and 60% higher than Spotify, Pandora, and SiriusXM combined.
• Radio has a 91% monthly reach of the U.S. adult population—higher than TV or smartphones. Of that number, it has the highest reach among those aged 35 to 49.
• Nearly 73% of all time spent listening to the radio happens in the car during morning and afternoon drives.

Frequently Asked Questions (FAQs)

Does radio advertising work for small businesses?

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How do I find the best radio stations to advertise on?

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How long are radio ads?

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Bottom Line

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.