Radio Results Blog

Advertising On Radio Soars: What Maine Business Owners Need to Know

Posted by Larry Julius on Sun, Mar 20, 2016 @ 06:48 AM

Share_of_Ear.pngIn a Forbes Magazine article a few months ago, Doug Schoen said of radio advertising, "It’s quite clear that we should all be paying more attention to radio, its reach and potential to help our businesses. It’s doing the job with expert efficiency." 

Based on spending data released this week by Standard Media Index (SMI), it appears that many business owners are heeding Schoen's advice and investing in radio advertising.

According to SMI, ad spending on radio increased in February by 22% versus a year ago. During the same period, newspaper advertising was down 17% and TV was up only 5%.  Overall ad expenditures were up 10%.

For Maine small business owners who have not yet included Portland radio as part of their strategic plan to market their products and services, here is why you need to reconisder.

1. Radio Has The Greatest Reach of Any Medium

Just about everybody listens to the radio. Data released last month by Nielsen shows that each week, 93% of adults listen to radio.  This is more than the number of people who watch TV, use a computer, use a smart phone, use a TV-connected device; or use a tablet.  As a matter of fact, radio still reaches the same percentage of adults each week as it did in 2001 when most of these other media did not exist.


2. Radio Advertising Offer the Greatest Return On Investment

Studies conducted by Nielsen Catalina found, on average, radio commercials produce a $6.00 sales lift for every $1.00 invested. According to Ad Age magazine, these findings indicate that advertisers can expect higher returns-on investment from radio than TV, digital, or social media.  Small business owners who advertise on Portland, Maine area radio stations have found this to be true also.

Cathy Manchester, a Maine base real-estate agent, expanded her sales by 100% after investing in radio advertising for one year. Cathy says, "It's a rarity when calls [generated from radio ads] don't turn into business immediately." Michael Storey who owns a Portland area landscaping company said, "We experienced a 45% growth in one year once we went on the radio."  Michael Major of Cunningham Security concurs. He says, "When we are not on the radio our phones don't ring."

The ROI study from Nielsen Catalina Solutions combined data from Nielsen's newly acquired radio-audience measurement business with shopper-card data from Catalina to link consumers' media usage directly to their buying decisions.  Radha Subramanyam, a media executive with deep credentials in television, digital and radio said, ""I have never seen such consistent delivery against advertising metrics and this kind of massive return on investment."

Of particular importance to Maine small business is how well retail advertising performed in the study.  Retail brands found the highest return on investment from radio advertising with results ranging from 11.1% ROI to 23.2% ROI.  According to Ad Age, these results are "eye-popping."

"Part of the high ROI relates to radio's relatively low pricing," said Ms. Subramanyam. Combine affordability with radio's ability to reach 93.1% of all consumers in the Portland area, and the ROI formula becomes obvious to any Maine small business including Mathews Brothers a window manufacturer in Belfast, Maine.  According to Bob Maynes, the company's director of marketing, ""We were the oldest company in the country that no one ever heard of."  But in just six weeks, radio solved that problem."

The Nielsen Catalina study of radio ROI reflect the findings of another study conducted in 2013 by major international media buying companies including Mindshare, Mediavest, Mediacom, and Havas.  Their study revealed that radio advertising returned $7.70 for every $1.00 spent. This was a higher return than those of newspaper, billboards, and online.

3. Radio Has The Greatest Share of Ear

An Edison Research study finds that Americans spend 4 hours each day listening to audio entertainment.  Despite the proliferation of new audio media over the past 10 years, traditional AM/FM radio is still winning the battle for listeners' ears. The study reveals that over-the-air radio commands a 52.1% share of all audio consumption.

Edison’s Share of Ear results are from a nationally representative sample of 2,096 Americans ages 13+ who completed a 24-hour audio listening diary during May 2014. In addition to AM/FM radio, the study included listening to internet-only services such as Pandora and Spotify; satellite radio; TV music channels; online radio stations; podcasts; and personal audio collections.  Here is how each medium fared:


4. Radio Reaches Radio Close To Point Of Purchase

Last month, Nielsen reported in their report, State of The Media: Audio Today, that radio reaches qualified consumers close to the point of purchase.  These are employed listeners who use the medium away from home during primary shopping hours.


Here are a few other recent articles where Maine small business owners can learn about radio advertising

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Tags: Small Business Marketing, Maine Small Business, Portland Radio