We Take One and Give You Six
Expect to hear this
statistic quoted a lot in coming months: Radio delivers a sales
“lift” of $6 for every $1 spent.
That was the finding
of a study of advertising “return on investment” conducted by
Nielsen Audio and Nielsen Catalina Solutions. It was released in late
March and received further attention in an April financial report
from Clear Channel, whose Media+Entertainment business sponsored the
The statistic is
likely to give U.S. commercial radio managers and salespeople a handy
factoid to add to their “elevator speeches” — what they would
say if they were on a short elevator ride and someone asked, “Why
should I believe in radio as a marketing channel?”
Reporting the “six
for one” statistic, Ad Age quoted a Nielsen Catalina official as
saying, “It’s shocking how connected people are to their radio.”
What’s shocking to
me is how easily radio’s connection is dismissed in the uncritical
“group thinking” common among financial analysts and competing
The study aimed
to determine how radio advertising influences actual retail sales,
and to measure ROI. Researchers took listener information for
specific commercials (as collected via the Portable People Meter, now
owned by Nielsen) and linked it to 60 million households of frequent
shopper data in a “single source” view. Their aim was to figure
out how radio spots influenced sales of products bought in listeners’
finding was that for every dollar spent on advertising, there was a
sales return of six dollars on average for those exposed to the ads
in the prior 28-day period,” the researchers reported. “The sales
impact was measured for the specific media buys of 10 brands, each of
which had different combinations of radio networks.”
Radio delivers strong consumer sales response close to the time of
purchase. The closer the exposure is to purchase, the higher the
response. Further, “African-Americans and Hispanics also showed
higher responses to exposure.”
Look. I know radio
has its issues trying to navigate its future due to evolving
platforms. And we can beef plenty about how U.S. commercial radio
corporations manage, or sometimes mismanage, their valuable holdings
through poor programming decisions. I don’t merely swallow all of
corporate radio’s Kool-Aid.
But people in our
industry should fight, fight, fight anytime someone around
them, especially in other media, repeats the canard that radio is
dead or dying, that ours is a medium made irrelevant by satellites,
smartphones and streaming.
This is a
simplistic, defeatist mindset — and a false one. But let’s
keep it from becoming self-fulfilling.
I’m happy to hear
a combative theme sounded more often lately.
Peter Conlon told me at the recent NAB Show that there’s good news
to be found around the industry, if you look; people are buying radio
stations and buying transmitters.
“Is that ‘stupid’
money?” he asked me rhetorically. No; those investors are not dumb.
“Radio has legs,” Conlon said with emphasis. “Innovation
is not dead.”
Emmis CEO Jeff
Smulyan, in an April video interview with the NASDAQ CEO Signature
Series, replied to a question about the “death” of traditional
media properties by politely reminding the questioner that “listening
to traditional radio has held up very well,” while reiterating his
view that activation of the FM chip could also dramatically help
“change the perception” of radio by making it part of the
exploding smartphone experience.
Cooke, writing in Talkers, noted positive remarks about radio at the
NAB Show by influential tech columnist David Pogue. Cooke
extrapolated: “As broadcasters, we have call letter cred and cume
and TSL and dashboards and habit, a powerful head start.”
And let us not
forget the big nut. U.S. radio reaches 244.4 million people in an
average week, according to Nielsen, 92 percent of the population.
That remains a powerful fact.
So even if you
aren’t a GM or account exec, get your own elevator speech together;
try it out in the mirror. Cynicism is easy to parrot; tell me
something different: Why is radio a good investment? Why is it
a place you want to spend the rest of your career?