5 Reasons to Rethink Radio Right Now

Twenty years after critics said MTV would kill radio and a decade after pundits predicted iPods would bury it radio is enjoying a digital-driven renaissance. Content providers have morphed the medium into a multi-platform bundle of options that ensure radio’s ongoing place in our media mix: AM/FM, satellite, streaming, mobile.

For listeners, this means countless new ways to enjoy their favorite music and spoken word entertainment. For advertisers, this broad spectrum of audio has made advertising’s most intimate mass medium even more attractive to those who like to target on a granular level.

To help you rediscover or reconsider your relationship with radio, here are five amazing things the medium can do today that will benefit your brand.

1. Radio can deliver 100% efficiency by age, gender, and geography

Many Internet radio platforms now fulfill this 100% efficiency promise. Let’s take Pandora, for example. With more than 70 million unique weekly listeners, Pandora competes with AM/FM networks for audience delivery and advertiser dollars. But while AM/FM can target specific demographics, advertising impressions (and ad dollars) are wasted on unwanted recipients.  A beer brand targeting men ages 21 to 34 on rock radio still pays to reach males under 21, men over 34 and all of the women who just happen to be listening to that programming.

On Pandora that same hypothetical buy would only serve that commercial message to men between the ages of 21 and 34. (Pandora listeners sign up by giving their age, gender, and ZIP code.) Buys can be placed to target “Nielsen friendly” demos like “Men 21-34” or custom-created targets like “Men 22-29.”

Things get really interesting when you overlay geography. A five-location Brooklyn restaurant chain can now target only Brooklyn, whereas a traditional media buy would likely include New York’s other boroughs, Connecticut, New Jersey, and upstate New York.

Advertisers can also create custom clusters of ZIP codes where their ads would be served.  Imagine what that might mean to a luxury brand that had never before considered radio to be a viable marketing option, but can now can deliver its message to adults ages 45 to 65 living in America’s 1,000 wealthiest ZIP codes.

2. Radio can deliver audience by lifestyle preferences

Beyond the broad market trends of Scarborough and PRIZM, radio can now match advertisers with an audience that shares lifestyle-compatible interests.

Take podcasts. Tens of millions of Americans download podcast programs on every imaginable topic. Ads are embedded in content and often voiced by the host. And once someone downloads your commercial in a podcast, your commercial becomes a permanent part of that download, served every time users play and replay the program.

iTunes Radio promises the ability to target based on a listener’s history of downloaded podcasts and apps. So, for example, an expensive olive oil brand could reach 10,000 people through a cooking podcast or perhaps reach millions of iTunes Radio listeners who, at some point, downloaded a cooking app from the App Store.

Triton Digital, which delivers AM/FM stations and other audio programming online to 40 million unique weekly listeners, has partnered with Big Data companies with the aim of matching advertiser offerings with consumer browser history. By searching a listener’s “cookie pools” at the start of an online radio session, an ad is then served only to those listeners who match specific browsing and behavioral criteria from more than a thousand different categories.

3. Radio can deliver a national campaign for the cost of a local buy

Radio delivers tremendous economies of scale when you leap from local to national. It’s like bulk buying 25-cent cans of soda instead of paying a buck apiece from a vending machine.

The challenge, for advertisers on a budget, is the prohibitive cost of air time on the larger networks. Sure, you’re buying listeners by the case, but the “case” may be too large, with some network spots costing upwards of $20,000 each.

Small-to-mid-sized AM/FM networks are one alternative, but for many marketers, SiriusXM Satellite Radio is the truly affordable solution.

With more than 25 million paid subscribers, SiriusXM blankets the U.S., as well as the populous lower tier of Canada. Dozens of advertiser-supported channels provide original content, from news and talk to sports and comedy. Others simulcast the audio feeds from America’s most popular cable TV networks.

An efficient weekly schedule can be built for $5,000 to $15,000, a budget comparable to a weekly buy in a market like Salt Lake City. SiriusXM also features popular air personalities willing to lend their voices to your brand to help jumpstart sales and brand awareness. SiriusXM Radio is an excellent entry level national radio “network” available to help you expand your advertising into a whole new medium.

4. One buy, multiple messages

For years, advertisers have placed multi-station local radio buys, varying the message on each station for maximum impact. Adults 25 to 54 were sliced and diced to deliver different messages to men and women, young and old. After all, a 26-year-old man’s buying triggers are much different than those of a 51-year-old woman.

Now, on the national level, new technology presents new opportunity to replicate these targeting tactics:

  • National AM/FM networks and syndicated programs now offer copy-splitting, whereby different messages are served via satellite to different markets.
  • Digital services like Pandora and Slacker enable copy-splitting by age, gender, and geography. One message can speak to 30-somethings while another speaks to 40-somethings. Men can hear one message, while women hear another. Retailers can specifically promote the one location nearest to each individual listener, rather than having to recite a laundry list of 10.
  • On a local AM/FM buy, smart advertisers produce multiple versions of their ads, using different announcers to keep the country voice off of the hip-hop station and vice versa. The same words carry more credibility when the right voice delivers the message.
  • Using behavioral targeting your radio ad can now be served only to listeners who have demonstrated a specific action of interest or intent. So instead of convincing someone to buy a hybrid car, you can target listeners who’ve searched for hybrid cars online and then tell them why to buy yours.

Radio has always been an intimate, one-on-one medium. But now you can peer through the looking glass to see who that “one” special customer is and tailor your message to make that person nod “Yes!”

5. Radio can be held accountable for results

Pricing for radio time can fluctuate like the cost of airline tickets—10 different targets might sell at 10 different rates, with each buyer confident of having got the best deal. It’s a supply-and-demand marketplace tempered by individual buying power and negotiation.

And just like seats on an airplane, radio ad time is a perishable commodity. If the plane leaves the gate with empty seats, there’s no way to turn back to generate that lost revenue.

Let’s say you’ve negotiated a $350 spot rate down to $265. Nice job. But here’s the important question: Did your campaign work?

If you needed to generate a $50 lead cost but ended up with a $70 lead, you might decide that radio failed. But if you could negotiate an additional 30% rate reduction—and buy that $265 spot for $185.50—you’d beat your $50 lead target and probably end up throwing more money at the medium.

Crazy? Sure it is. Until you realize that the radio stations with unsold inventory would much rather take 70 cents on the dollar than zero cents on the dollar.

Your objective is the same as the radio station’s objective—to keep the client on the air as a cash customer. And you’re more than happy to do that if you’re generating the return on investment that justifies the investment. You won’t if it doesn’t.

This responsible approach to radio advertising gives the radio station, network, or delivery platform a chance to keep your business, extending the opportunity for radio reps to live up to their promise of being your marketing partner.

The wrap

A decade ago, it was uncertain whether or not radio would survive the proliferation of new media. The death of radio was predicted so often I kept a black suit and tie in my office just in case they ever actually announced the time and date of the funeral. Today, it’s clear that radio—in all of its forms—has weathered the onslaught of would-be assassins to cement its place in our lives and lifestyles.

And as these five examples illustrate, radio has learned how to project its voice in the new media marketplace, rather than go softly into the quiet night.

Mark Lipsky is president & CEO of The Radio Agency. You can reach him at [email protected].

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