The alarm sounds each morning with the tunes or talk of a favourite radio station and the latest news, sports, weather, and driving conditions are companions on the daily commute. Throughout the day in elevators, offices, and even on hold, radio is omnipresent.
Historically considered a retail medium, radio has been striving to prove it’s much more than that. Today, as advertisers explore all media options, the radio industry is investing heavily in research that shows it has all the attributes marketers are looking for – targetability, effectiveness, and cost efficiency.
But while radio truly does offer an impressive list of benefits to marketers, there are clouds looming on the horizon that have some agency executives concerned.
Hugh Dow, president of M2 Universal in Toronto, says the radio industry is being challenged by new technologies and communications forms such as Internet radio, MP3s and, very soon, satellite. Radio has already seen significant decline in the number of teens and, to some extent, 18-24s tuning in, he says, because they’re not being served by conventional broadcasters so are in download mode.
Dow says: ‘I think when you really look down the road to the next five or 10 years there are some pretty major challenges facing the radio industry.
‘The only way radio can really address this is by providing local content that is not available on a national basis – which is what satellite radio will provide – but of course when you do that, it’s a pretty expensive proposition.’
Dow adds that satellite radio penetration will build rapidly thanks to the automakers – all General Motors cars will be equipped with the XM satellite system beginning with the 2006 model year and most of the others have lined up behind competing systems.
Still there is an advantage to radio: It performs well for advertisers. Unfortunately, it has been the poor cousin to TV when it comes to advertising creative and that has meant a lot of cringe-inducing spots. But with the focus on ROI driving renewed interest in the medium, there is hope that the crafting of radio commercials will once again be a priority at agencies.
Radio used to be referred to as ‘theatre of the mind’ and it is still extremely compelling with great creative, says Lynn Dawe, VP group account director at MBS/The Media Company in Toronto. A case in point is one of her all-time favourites, the award-winning ‘Real life. Real drama. Real TV’ 60-second spots created for TSN in the late-’80s by Ambrose Carr Linton Kelly (now Ambrose Carr Linton Carroll) of Toronto.
‘The radio campaign was brilliant and all about the brand,’ she says. ‘It was very visual despite the fact it was on radio. It was almost like you were seeing the goalie in the net the way it was described. If you have creative that sounds like that, you can build a brand.’
Stepping up the creativity in radio is well worth the effort because the media buy can all be tailored to specific audiences, thanks to radio’s cost effectiveness and wealth of available research, such as BBM Canada’s RTS (return-to-sample) study, says David Bray, SVP of Toronto-based agency Hennessy & Bray Communications.
Bray says people wear the radio stations they listen to somewhat like badges of honour. Through the research, the core listener is very identifiable in a way that a CTV or CBC viewer would never be.
‘You have a sense of what a CFNY, CFRB, or Q107 listener is and all it entails – product usage, lifestyle. That allows you to do creative that is very intrusive and speaks to the target in a way they can relate to. The buying procedure is more targeted as well. You don’t do a spot and then find a place to put it.’
Bray says using station personalities in the commercials is one way to build on the sense of community that listeners have. ‘Use the information at hand to tailor the creative, the personalities, everything about it so you give listeners what they want – or at least what they’re predisposed towards.’
When done right, the medium certainly can do wonders for the brand – and the bottom line. The Radio Marketing Bureau has been working hard to accent all that is positive about the medium with a number of research studies, most recently a successful test campaign conducted earlier this year in Toronto and Montreal for Nestlé Canada.
The report shows that sales volume for the two Nestlé brands in the test rose significantly when the advertising was in market. Online research conducted by Millward Brown of Toronto indicated brand awareness above its norm of 11%, as well as favourable scores for ad content, effectiveness, and perception of the brand. Additionally, comparisons of
pre- and post-campaign numbers showed large increases in trial, and adoption of the brands.
During the radio campaign run in Toronto, sales for the two Nestlé brands jumped 16% over the previous eight weeks and then up to 27% when adjusted to account for a distribution issue. (In Montreal, Nestlé experienced a sales increase of 10% and a 4% lift when distribution declines were factored in.)
Such a positive response wasn’t a big surprise for Nestlé, which has used radio in the past. Terri Tinella, SVP, communications and marketing effectiveness for Nestlé Canada, says media mix is determined during planning when Nestlé marketing works with its agencies to evaluate all options, choosing those that can best meet objectives for each brand.
‘At Nestlé, we believe all media can have a role to play in the communications mix. But the magic happens when the media, combined with the needs of the brand, are effectively matched with the key consumer.’
Since radio offers a definitive audience, it’s no surprise that Tinella has found it to be
consistently effective for delivering against either promotional or brand awareness objectives.
In the case of Black Photo’s national chain of 156 stores, it did both.
During its 60-year history, Black’s competition had always been other specialty camera shops and, more recently, mass merchants such as Wal-Mart in the case of photofinishing. In 2002, digital photography appeared on the scene and was projected to have household penetration of 30% by Christmas 2004. That meant Black’s was also now competing with big box electronics retailers such as Future Shop and others selling computer peripherals.
Roy Bower, director of marketing for
Black’s, says the company has always used radio in select markets to support its print and in-store efforts, particularly to increase reach and frequency beyond the company’s flyer distribution. When the specialty chain faced this major shift in the photography category, radio was brought into play to go beyond Black’s usual retail promotions. The company now had to do some brand building to differentiate itself; to sell digital hardware while also positioning Black’s as the expert in digital photography.
The result was the ‘I know Black’s knows’ radio campaign created by Toronto-based Brazil Communications for Christmas 2002.
‘After airing the first wave of the creative,
we found a remarkable thing happened,’
says Bower. ‘We got reports from the store
associates that customers were walking into the stores reciting back to the staff that ‘I know Black’s knows.’ I’ve been in the
business a long time and I’ve never seen that happen before.’
Not only that. During the campaign, now in its third year, sales increased. For instance, sales rose 11.4% from November to December 2003 versus the previous year. Its market share for digital cameras grew 1% for Christmas 2002 and 2003.
This year the theme has been incorporated into all of its P-O-P and collateral material. In addition to traditional radio spots, Black’s extends the run of its campaigns through use of traffic, weather and program sponsor tags.
In any case, not all pundits are sounding the death knell for radio. Steve Aronovitch, broadcast investment manager for Starcom Worldwide in Toronto, says he’s finding that more national advertisers are using the medium now than in the past specifically because it’s a good, strong way to build brands, particularly when there’s a promotional angle. It’s also a quick in-and-out medium with short lead times and the ability for frequent creative changes.
A good illustration of this, says Aronovitch, is the tactical way beer
and spirits marketers use radio in the summer by running short promotional campaigns built around a specific window of time such
as a long weekend to not only drive sales but also get their brand message across.
And he agrees that the medium’s targetability is a big factor in making promotions like this work. ‘That’s a strength of the medium – it has a finite audience and that audience is attracted to this specific format. The stations understand that and ensure their format meets the needs of those listeners.’
Radio vs TV advertising: one-third cheaper, over twice the GRPs
There are rafts of reasons why advertisers have pushed their agencies towards media-neutral planning, including soaring conventional TV ad rates and television’s declining audience numbers as well as accountability and media fragmentation in general. Other media have jumped at the chance to show their viability as options – and radio is no exception.
The Radio Marketing Bureau (RMB) has been investing heavily in research demonstrating how radio not only sells product but also builds brands and brand awareness.
One of the organization’s recent studies compared the cost and advertising effectiveness of a national radio campaign versus a national TV campaign. It found that radio cost one-third less than a comparable TV campaign for a longer run – seven weeks versus five weeks – and bought more than twice the GRPs.
Identical criteria were used for planning each campaign – a $1 million budget for national English and French-language campaigns of 30-second spots to be executed against adults 25-54 and 18-49 during the
high-demand fall 2004 period.
The TV campaign against the 25-54 demo cost $998,000 for 450 GRPs ranging from 80 to 100 GRPs for each of the five weeks. The portion targeting the 18-24 group cost just over $1 million and resulted in 430 total GRPs at 80 to 100 per week.
The comparable radio campaigns each cost about $1 million for three times more GRPs than the television schedule. A total of 1,340 GRPs were delivered against each demo at 200 GRPs for each of the first six weeks and 140 GRPs for the seventh.
RMB concluded that in addition to cost effectiveness, radio gives advertisers a sustained presence in the marketplace they can’t get with higher priced TV advertising.
