Earning a decent return on your money has been tough over the past few years. Right now, a 12 month certificate of deposit at Bangor Savings Bank returns an underwhelming .15%. In other words, lend the bank $100 of your money at the end of a year they will give you fifteen cents. Treasury bonds, and corporate debt doesn't do any better. And stocks? According to Morningstar, a stock rating service, the average of all stock mutual funds have only delivered a 3.34% return. So where can a Maine small business invest its money to generate a significant return on investment? The answer is Portland radio.
According to information from Nielsen research, 704,822 adults listened to a Portland radio station last week. They listened at home. They listened in the car. They listened at work. Despite all of the other competition for these listeners' ears, traditional AM/FM radio remained the dominant choice. This is great news for Maine small business owners who continue to expand their business advertising on radio. This includes local real estate agent Cathy Manchester.
Cathy Manchester is a veteran real estate agent in the Portland, Maine area. Prior to adding radio to her marketing mix, her team of agents was selling a respectable 100 homes per year. Cathy, however, wanted to take her business to the next level. To achieve her goal she consulted with high-volume agents across the country who were selling 200-500 houses per year. According to Cathy, "One of the things I found that was consistent with them is they were all using radio." As a result of her research, Cathy added radio as a primary component of her marketing. Over the course of her first year using radio, Cathy's sales have doubled.
Cathy's success is not an anomaly. Other Maine small business small owners have had similar success including Mathews Brothers, a local window manufacturer; WH Demmons, a local roofing contractor; and even the Maine State Department of Agriculture. Recent studies of consumers by Nielsen-Catalina, a research company that analyzes the effect of marketing on product sales, show that this advertising success using Portland radio is not unusual. As a matter of fact, the return-on-investment that radio returns, according to Nielsen is far greater than investing in certificates of deposits; treasury bonds; or mutual funds.
Radio Advertising Delivers Massive Return On Investment
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 advertising trade magazine, 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 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.
Radio Advertising Can Deliver $14 in Sales For Every $1 Invested
A subsequent study by Nielsen compared sales results of a telecommunications company that advertised on radio versus 4 similar companies who did not. The radio advertiser's commercial schedule was married with Nielsen Catalina consumer purchasing data that pulls together the credit and debit card transactions of more than 125 million adults. “The results showed that radio delivered $14 dollars in incremental sales for each dollar invested in advertising,” Nielsen reports.
According to Inside Radio, an industry newsletter, Nielsen says there was also a “meaningful lift” in how much consumers who heard the radio spots spent. Those who heard the commercials spent an average of $8 more per month than consumers who weren’t exposed. The impact was twice as big among millennials, who spent an average of $16 more after hearing the radio ads.
Free Download For Business Owners