Radio Advertising Expert Q&A: An old medium is surprisingly vibrant, affordable, and responsive
by Robert Lerose.
In the rush to integrate new tools like blogging, mobile marketing, and online video into the marketing mix, small businesses often dismiss radio as dead or irrelevant. Nothing could be further from the truth. According to a recent report from Arbitron, the audience for radio has grown in almost every demographic group over the last year. This comes as no surprise to Buck Robinson, president and CEO of Robinson Radio, a Virginia-based radio advertising agency. Since 2004, his agency has created campaigns for companies like iContact, CustomInk.com, and Oragenics, and has made Inc. magazine’s list of the fastest growing privately held companies in the U.S. for three years in a row.
RL: Radio possesses an enormous staying power that only seems to be growing. What are some of the advantages for small business advertisers?
BR: One of the best things about radio is that the costs associated with production and running a viable media test are still low enough that smaller businesses or entrepreneurs can afford to play. Second, there is a great deal of targeting capabilities, so it’s more efficient—but it’s also a mass medium. The Internet is made up of so many smaller players, but radio has both the economies of scale as well as the targetability. You can get into it in a way that allows you to reach a large number of people cost effectively with a message that’s very well targeted. It’s the best of both worlds.
RL: So even though it’s a mass medium, you can target your ads to a particular audience?
BR: Correct. In radio, you don’t need to come up with one ad [as you might for a print publication]. You can try a lot of different messages. You can come up with an ad that works on country stations, conservative talk stations, urban stations—and having all those very targeted, very customized messages is going to cost you a few hundred dollars per new commercial.
RL: Radio has become a bit more crowded with things like Internet radio and satellite radio. How does this changing landscape affect small business advertisers?
BR: All of the new iterations are not meant to destroy the traditional AM/FM radio, but to supplement it. These are extensions of radio as a larger concept—not competitors in the truest sense. People who consume AM/FM radio still have SiriusXM in their cars. They still sit at their desk and listen to Pandora. It’s not that one has replaced the other. As this universe of potential advertising vehicles has grown, we look at it—and advertisers should look at it—as good.
RL: How do you navigate all these options?
BR: The challenge lies in figuring out how to truly coordinate and orchestrate them. How are they similar? How are they different? And more importantly, how do they feed into one another in order for the marketer to use one as a doorway into the next, into the next, into the next?
RL: For example?
BR: When you look at the overall universe of listeners for something like Pandora, it’s still very small compared to traditional AM/FM radio. [But] we can apply what we learn there to the even larger universe on AM/FM radio. It’s a great [way] for learning, testing, trying different messages, and seeing how to optimize a campaign before you move into a larger medium.
RL: What are some of the first steps a small business should take in considering radio advertising?
BR: There are a lot of agencies where radio is kind of this adjunct appendix on the end [of their services]. What that typically means is, they could do radio if you really wanted it, but it’s not where their focus is. A lot of those other larger multichannel agencies outsource their radio business to us because all we do is radio, we do it better than they do, and it’s cheaper for them than having to staff people for a medium that’s not their core specialty.
RL: What else?
BR: Before you do anything, get some expert advice to validate [your belief] that radio could be a good
medium for you. To me, an expert is someone who is buying radio on a consistent basis (52 weeks a year) and has a depth of experience—preferably both positive and negative, so that they are truly seasoned. Second, some clients who come to us think they know who their customers are or who they would like them to be, but they don’t really know. They have a lot of assumptions and no real data to tell them. [It’s smarter to] go out with a broader approach and see where they’re getting the best response and ROI. In a lot of cases, that’s an eye-opening experience for clients.
RL: What are some common mistakes that small businesses make with radio advertising?
BR: The biggest black eye that I see is [when an advertiser says] that they tried radio and it didn’t work. Typically, one of two scenarios is at play. One, a radio station called them and said they should be on the radio, sold them a $50,000 buy, and it didn’t work. Or two, the advertiser wanted to do radio, but their agency [didn’t know] what they were doing and it ended up being a very bad buy. Then, the advertiser looks at it as radio’s fault. It’s a matter of going in smart, not just bullheadedly spending money and seeing what happens.
RL: What are some costs for advertising with radio?
BR: Every campaign is a little different. To launch a national campaign, we normally tell our clients they need to spend a minimum of about $30,000. That will get you enough different pieces of creative on enough different, well-targeted outlets to determine what’s working and what isn’t. You need to try enough things to figure out what does work and build from that. The costs will be different for a regional or local campaign.
RL: When you say different, you mean they would be much less than a national campaign?
BR: Not necessarily. You could pay as much for a “local” test in markets like New York City or Los Angeles as you would for a national test.
RL: Could you give me a ballpark figure on what a modest local radio campaign might cost in some of the smaller markets?
BR: Trying to ballpark “local” is extremely relative, but it’s likely to be in the $10,000 to $20,000 range. Anything less will likely be ineffective and anything more is likely overkill. The key is not to spend all that money on only one station for a long time, which is typically what station reps try to sell.