One of the great challenges of selling advertising is trying to convince a Maine small business owner they shouldn't run commercials on a Portland radio station just because it is their favorite. These well-intentioned business people are sometimes victims of the halo effect.
The halo effect is a well-documented cognitive bias that occurs when a person applies their overall impression of a company to each of the company's component characteristics. In other words: I love everything about my favorite radio station, so I have no doubt it would be a perfect place to advertise my business. In this case, although untested, I have assigned positive traits to the advertising value of the station based on the station's knack for playing my favorite music.
Warning, Will Robinson! Often, the halo effect leads to some very bad business decisions. This is one of them.
Last week I read a classic halo effect story about a man name Henry in the Eureka Times-Standard. Henry, who owns a pest-control business on California's central coast, told the newspaper's legal advice columnist, "I was desperate for more business." What Henry ended up with was nothing but an invoice from a local radio station and a desire for legal advice on how not to pay.
The Right Message...The Wrong Audience
"One morning," Henry told the paper, "a radio advertising sales rep — Sharon — came to our office and we spent about an hour talking. She asked me all kinds of questions about my business, explored ways in which radio advertising could increase customer traffic, and how radio works. She convinced me that with the right ads at the right time on the right station I would definitely see more customers"
“One of [Sharon's] stations," Henry continued, "plays pop music (similar to WJBQ in Portland) that our teenage girls listen to and which my wife and I like. I thought that would be an excellent choice." Henry went on to defend his decision to purchase a campaign on a teen-oriented radio station. "I know kids hate bugs and would tell their parents about my great offer they heard on the radio.”
I'm Paying...I Know Best
Sharon, however, did not think the pop station was the best choice. Instead, she recommended an adult contemporary radio station (similar to Coast 93.1 in Portland). Henry recounts, "She said adult contemporary would be best as teenagers do not make decisions about pest control services." Henry then told Sharon, "since I’m paying, I should be able to say which radio station I want to be on.”
So, according the newspaper's account, despite Sharon's advice to the contrary, Henry signed a six-month contract to advertise on his favorite radio station. Then, to no one's surprise, the campaign failed. Henry told the newspaper's columnist that he noticed very little change in his business during the first month of advertising and asked to be let out of his contract. Also, that he be refunded for the commercials that had already run.
Classic end to a bad halo-effect decision.
So how does a Maine small business owner avoid Henry's mistake when choosing the right Portland radio station to advertise on?
Step 1: Articulate A Marketing Objective
According to the Small Business Guide For Effective Radio Advertising, before a business owner can choose the radio stations to use, a marketing objective must be selected for the campaign. To be effective, every campaign should have just one objective that relates to one of the business’s major priorities.
The objective chosen will determine not only the radio station selection but also the length of the campaign, and content of the commercial. Fortunately for the business owner, there are only two types of marketing objectives to choose from:
1. Branding objectives are used when you want your target consumer to believe something about your product or service. An example of a branding objective could be: Get working mothers to believe that my daycare service is the safest place in town to entrust their children.
2. Promotion objectives are used when you want your target consumer to take specific action. An example of a promotion objective could be: Get people who maintain their own cars to buy 3 quarts of motor oil at my store this weekend.
Marketing objectives should include a singular, well-articulated target consumer. Using gender and age alone are too broad to be effective targets. Instead, it is imperative to target the consumer by lifestyle. Some examples could be:
- Working Moms
- Shoppers With Home Depot Cards
- People Who Plan To Retire In 5 Years
- Under-employed, College Graduates
Selecting a very specific target will be critical for choosing the right Portland radio stations to advertise on.
Step 2: Choosing Quality Not Quantity
The cost of advertising on a radio station is generally proportional to the number of listeners it has. The most listened to station in Portland, therefore, is usually the most expensive on which to advertise. When advertising on a budget, however, the station with the greatest quantity of listeners may not be the best value for a small business's marketing dollars because the owner will pay for every person who hears a commercial...even those listeners who may not be the ideal target consumers for the advertised product or service. In many cases, smaller, less-expensive radio stations may be more likely to reach the target customers being sought than the larger, more expensive stations.
For instance, an owner of an upscale furniture store might want to target consumers who earn $100,000 per year and are planning to buy furniture in the next 6 months. In Portland, for instance, this target audience might represent only 3.7% of the total population. When choosing a radio station on which to advertise, therefore, this budget-minded furniture store owner would not want just the station with the most listeners, she would want a station that was composed of at least 3.7% of listeners who earned $100,000 per year and plan to buy furniture in the next 6 months. Certainly, the greater a station's audience comprises the retailer's target audience, the greater advertising value it has.
The Formula For Success
In marketing, comparing the percentage of a target consumer in the general population to the percentage of the target consumer among a station's audience is called indexing. The formula for calculating an index is [(% of Target Consumer In Market)/(% of Target Consumer Among Station Listeners)x100]. In the furniture store example above, the index would be 100 [(3.7/3.7)*100=100]. When, as in this example, the index equals 100, that means that the instance of target consumers among a radio station's audience is exactly the same as the instance of target consumers among the general population.
So suppose a local appliance store wanted to specifically target Home Depot shoppers who were planning to make a major appliance purchase over the next 12 months. In Portland, 4.4% fit this description. Research indicates that only 2.8% of the audience of the most listened to station in the market fits this description. That would be an index of 64. In other words, the audience of the most listened to station is 36% less likely than the general population to be Home Depot Shoppers who plan to make a major appliance purchase over the next 12 months.
On the other hand, another Portland radio station in the same market has few listeners but 7.9% of them are Home Depot shoppers who plan to make a major appliance purchase in the next 12 months. This would compute to an index of 180. This means the station's audience is 80% more likely than the general population to be Home Depot shoppers who plan to make a major appliance purchase over the next 12 months. Additionally, the index tells us that the audience of the less listened to radio station is 112% more likely to match the target audience than the station with more listeners.
So if you were the owner of the appliance store and you working with a limited advertising budget, then which station should you choose? The best choice is the second station even though it has a smaller audience. The reason is simple. Everyone who hears your commercial on the second station will be 116% more likely to be your target consumer than the listeners of the first radio station. No doubt, a much better return on investment.
To help determine how a small business's target consumers index against various Portland radio stations, a reputable radio station representative can provide the specific research necessary. The most reliable research comes from Nielsen’s Scarborough Report and from GFk MRI.
More Great Advice For Maine Small Business Owners
- Portland Radio Drives Maine Small Business
- What Keeps Portland Radio Listeners Tuned-In?
- Maine Small Business Owners Can Advertise For Free on Portland Radio
- Maine Small Business Owners Choose The Top 10 Radio Articles of 2016
- The Ear Wants What The Ear Wants. Advice For Maine Small Business.
Click here to read the full article in the Eureka Times Standard