Radio advertising is a marketing strategy that uses the radio – both traditional stations and satellite and internet radio – to promote a product or service. In many cases, it is a less expensive form of advertising, especially compared to television advertising.
With the advancement in technology, radio advertisements are becoming better when it comes to quality. Despite the competition from other forms of advertisement, Nielson Audio reports 243 million people to listen to the radio and can listen to advertisements.
Let’s dive into some radio advertising basics to help small businesses be smarter with how they buy radio ads.
Radio Station Formats
The format determines the audience the station appeals to and the audience it delivers to advertisers. Some of the most common radio formats include:
- Top 40
- Progressive rock
- Classic Rock
- Golden oldies
- Christian Rock
- News and Talk Radio
- Adult contemporary
- Easy Listening
Which Format is Best For Each Demographic
The format of each station impacts which group is typically the core demographic a station will reach. The following will give you an idea of which format targets which type of listener.
- Teens 12-17 – Primarily Top 40, Urban, Alternative
- Adults 18-24 – Top 40, Alternative, Urban preference
- Adults 25-34 – Alternative, Rock, Top 40, Urban, Adult Contemporary
- Adults 35-44 – Rock, Adult Contemporary
- Adults 45-54 – Oldies, Adult Contemporary
- Adults 55-64 – Classical, New Adult Contemporary
- Adults 65+ – Adult Standards, Classical, News Talk
Types Of Radio Spots
Radio advertisements are called spots; businesses buy them to promote their brand. Radio advertising is subdivided into three types – live read, sponsorship, or produced spot. Companies that want to promote their products and services must choose the radio advertisement they want to pay for.
A radio station has an ad time inventory of about 18 minutes per hour, which it sells in increments of 15 seconds, 30 seconds, and 60 seconds.
Live read happens more often at events. The commentators at the event would perform live reads, read the brand aloud, and hope that the product’s quick advertising will reach more people. Radio hosts who have many followers and are known in the industry are also hired to live-read an advertisement.
Onsite Broadcasting Events
Radio hosts are local and regional celebrities in their own right. Many people follow them and have an affinity for listening to certain on-air personalities. Many times radio stations will offer onsite events to their advertisers. This includes the on-air personality coming to the business location and broadcasting live to get fans to join the business.
Sponsorship is another type of radio advertising usually inserted into traffic, weather, or sports scores segments within a show. For example, the announcer will tell the listeners that a brand sponsored the segment. This type of advertising is usually used for branding purposes and can help increase name recognition.
Traditionally Produced Spots
Lastly, the produced spots are full-blown radio advertisements that use dialogue, voice actors, a story, and a jingle. These informative advertisements would encourage the listeners to buy the products and services from a certain business.
How Much Do Radio Ads Cost?
Radio stations have many ways they define pricing, such as the number of people listening to your ad, demographic of the radio station’s audience, demand for an ad spot, special events, or if its Sweeps week (the times during the year when radio stations are judged and given their ratings). But at its core, the following equation is used to define radio advertising cost.
Number of People Listening x Cost to Reach 1,000 listeners (CPM) = Cost of Advertising Per Spot
The CPM rate will vary greatly from station to station (depending on the programming) and market to market (depending on the size).
- The average CPM rate is $12 – $16 ranging to target listeners between 18 and 49.
- The average CPM rate is in the $8 – $12 range for the 50+ audience.
- The late evening and overnight costs will be lower due to inventory and the number of users listening.
Benefits of Radio Advertising
Some people may think radio advertising is becoming obsolete because of the prevalence of the Internet and other related advertising platforms. However, this is not the case – millions of people all over the United States are still listening to the radio, most of them from inside their vehicles or homes. Many companies are still allocating marketing budgets to the radio to take advantage of the benefits listed below.
Each radio station within your market will target specific demographics and market segments. These are usually defined by the programming, the type of music being played, the on-air personality, and what time of day your advertising will run.
Radio advertising is defined by many as a frequency medium. This means that unlike television advertising (which relies on reach and visual presentation), radio relies on repetition, aka frequency of message, to be effective.
Playing your advertisement multiple times (some say it takes three times to hear a spot before you internalize it, acknowledge it, and remember it) will ensure that your listeners will be familiar with your product or service.
Radio advertisements can be more memorable compared to written and visual ads. According to researchers, sound can be stored effectively inside memory for longer than visuals. This is why some companies are doing their best to create a memorable jingle that will stay in the minds of those who will listen to it.
Radio advertising is cost-effective when compared to television and print advertisements. Usually, the cost to create the spot – if you don’t have one – will be included in the radio advertising campaign’s price.
Short Time to Market
When creating a television or print advertisement, the time frame required to produce a single commercial or print ad would span weeks or even months. However, with radio advertisement, a radio host can instantly advertise the product or service.
Drawbacks of Radio Advertising
One of the most prevalent disadvantages of advertising on the radio is the poor attentiveness of the people who are listening. Many people are either changing channels on their radio when driving or are too focused on the road to pay attention to what is being said.
Lack Of Visual Appeal
Compared to television which uses the sense of sight and sound, radio advertising only impacts one of the five senses – sound.
One way to offset this is to utilize additional advertising channels that the radio station has – such as buying ads on their website or for sponsorships at events.
Buying Spots Can Be Challenging
Radio stations have regional sales reps that also offer spots to larger brands. Often, these spots are planned far in advance and take inventory away from new advertisers; thus, obtaining the place you want can sometimes be difficult when inventory is low.
Tips For Radio Advertising
- Hire a good writer that can create interesting advertisements.
- The advertisement should be short, simple, and focus on a single message.
- Use dialogues, interviews, or stories to present the product.
- The advertisement should be direct to the point and include a CTA you want the user to take – remember they are most likely in their car, so make the action easy and memorable.
- Provide a deal or hook within the message.
- The advertisement should also have a different story and appeal to one’s emotions and logic.
- A good radio advertisement should have a talented voice actor and production manager that would transform the listeners’ experience.
Current Statistics About Radio Advertising
- Every week, nearly 92% of the American population is tuning into the radio. The majority of those who love to listen to the radio are people who drive and stay at home.
- Every day, around 59% of the total American population is listening to a radio program.
- More than 6,000 radio stations in the United States and thousands more can be found in other countries.
- 25% of those listening to radio advertisements are buying the product advertised after hearing it on the radio.
- Radio is one of the most accessible forms of media in the world today, despite the prevalence of the internet and television.
How To Measure The Success Of Your Radio Ads
You can determine the impact of a radio advertisement if you compare the sales figures, brick-and-mortar visitors, and website traffic before and after the advertising campaign. We recommend using a unique phone number or website address that can only be attributed to the radio advertisement. This will help you better track the response you’re getting from your radio advertising.
Key Radio Advertising Definitions
- Average Quarter-Hour Rating (AQH Rating) is the total number of people listening to a radio program for five minutes every 15 minutes.
- Cost Per Thousand (CPM) – this term is also known as cost per mille, and it is a marketing term used to identify the price for every one thousand impressions, especially when done on a website or radio. For example, those who want to pay for their radio advertimustneed to speak with the radio station and identify their cost per thousand. If the radio demands $1 CPM, the advertiser, for every one thousand impressions, must pay $1.
- Gross Rating Point (GRP) – is a term widely used in advertising, measuring the impact of an advertisement. To calculate it, you need to get the percentage of the target market reached by the advertisement and then multiply it by the exposure frequency.
- Cost per Point (CPP) – this is the cost that an advertiser needs to reach their particular goal when advertising using the radio.
- Net Reach – This refers to the total number of people who will listen to an advertisement played on the radio at least once.
- Cume Person – short for “cumulative audience.” It is the number of listeners who listen to a radio station for at least five minutes during any period.
- Exclusive Cume refers to the number of people listening exclusively to a single radio station on a particular day or time.
- Rating – this is the total number of households listening to a particular radio station or program for a given time frame. Popular radio programs have higher ratings than their competitors, and through the years, the rating system has become the benchmark for radio stations to charge more or less.
- Share is the percentage of radios tuned into a particular radio station in a specific time frame.