Companies utilize radio advertisements to promote services or products across the radio, normally in 30 or 60 second spots. Radio may be more expensive than some newer advertising techniques, but it is a very powerful medium, reaching 93 percent of American adults per week according to Nielsen data. With an adequate marketing budget, you can use radio to work for your small business.
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In this article, we will discuss radio advertising in detail, including costs, and explain to you how you can create your very first radio advertising.
When Radio Advertising is Ideal for Your Small Business
Some tiny companies fare better advertising on the radio compared to others, but advertisers may anticipate an average of 11.8x return per dollar spent on their radio ad, according to a Nielsen analysis of five businesses published in 2017.
Here is more information on the return per dollar spent on radio ads in different sectors:
Radio Advertising ROI by Sector
| Business | Return on Ad Spend (per $1 invested ) |
|---|---|
| Department Stores | 17 |
| Bulk Merchandiser | 16 |
| Telecommunications Provider | 14 |
| Home Improvement | 9 |
| Quick Service Restaurants / Fast Food | 3 |
Some kinds of companies are more effective on radio than others.
Resource: Nielsen
Since traditional radio reaches a broad audience, companies like telco suppliers and department stores generally have more success performing radio advertisements because they provide services that cater to demographics. Even in the lower end of this spectrum, quick service restaurants and fast food restaurants nevertheless saw a 3x yield on their advertising spend.
When Not to Use Radio Advertising
If you are in a niche market, it is most likely not in your very best interest to advertise on the radio. While you can target based on broad strokes, you can not hyper-target your audience just like you can with online advertising. By way of example, if you’re a distributor of vegan food products, it is not a good idea to do radio advertising since only 7 percent of Americans recognize as vegetarian (and an additional 6 percent as vegetarian), so roughly 90 percent of people listening will probably have little to no interest in your product.
But while the product may be applicable to only 10% of people listening to the radio, then it is probably related to 100 percent of people searching”vegan food” online. That is the reason why online ads can extend your dollars much further than radio advertising for this sort of market. To find out more about online advertising, check out our guides to Google, Bing, and Facebook ads.
How Much Radio Advertising Costs
Radio marketing costs can range from $200 to $5,000 a week based upon where you are. You’ll also have to factor in the price of producing the commercial, such as copywriting, voice talent, and audio / visual editing, which can add up to $300 to $1000.
Below, you can see the estimates of each week advertising prices based on location utilizing high performing radio channels from Local Marketing Ideas. These include 15 spots from Monday-Friday and 5 spots around the weekend:
Radio Advertising Weekly Estimated Price by Market
| Economy | Cost Range |
|---|---|
| New York City, Los Angeles, Chicago | from $4000 to $8000 |
| Dallas/Ft. Worth, Houston, Phoenix, San Diego | from $2000 to $5000 |
| Denver, Cleveland, Kansas City | from $1000 to $3000 |
| Akron, Wichita, Baton Rouge | from $800 to $2000 |
| Myrtle Beach SC, Green Bay, Topeka | from $500 to $1500 |
How Radio Ads are Priced
The pricing for a wireless ad ultimately comes down to the following equation:
Number of People Listening x Price to Reach 1,000 listeners (CPM) = Price of Advertising Per Spot
The amount of people listening is best quantified by Average Quarter-Hour Persons (AQH Persons). The radio channel can provide this data point for the slot you are interested in.
The CPM rate can vary greatly from station to station, and market to market. The average daytime CPM rate is typically in the $12 — $16 range for adults between 18 — 49. In the event the audience that listens to the air will be older than 50, a CPM of $8 — $12 is reasonable for daylight. The day and particularly overnight should be lower.
The table below shows some additional terms you may encounter when calculating radio advertising costs. Listed below are brief definitions of useful radio advertising phrases from Nielsen:
| Radio Prerequisites | Definition |
|---|---|
| Average Quarter Hour Rating (AQH Rating) | Average amount of people listening to a channel for at least 5 minutes during a 15-minute timeline |
| Price Per Thousand (CPM) | The calculated price to achieve 1,000 listeners |
| Gross Rating Point (GRP) | That can be one step of the impact of your advertisement (it is equivalent to the percentage of the target advertise your ad reaches multiplied by the frequency by which they hear your advertisement ). |
| Price per Stage (CPP) | The Charge to reach AQH equivalent to 1 percent of a demographic |
| Net Reach | The number of individuals a station can reach in a certain interval |
| Cume Individual | Total number of Individuals who hear some radio for at least 5 minutes |
| Exclusive Cume | Total amount of Individuals who listens to only 1 radio station |
| Rating | The Proportion of listeners for a channel divided by the total population in a region |
| Share | The percent of individuals in a region who listen to a specific station |
Factors Behind Radio Ad Cost
Number of individuals listening to a ad
The principal factor that affects cost is the percent of people who will be listening to your ad. Therefore, spots during the daytime and evening commute will cost more than spots late at night. Likewise, playing an ad in a huge city will cost more than an advertisement spot in a small town.
Demographic of the radio channel’s audience
Radio stations that have an audience between the ages of 24-54 will even have greater costs. That’s because this age group has the highest purchasing power, and so many businesses want to advertise to them. You can also expect to pay more for channels that attract a wealthy audience, such as a jazz or classical station.
Requirement for an ad spot among advertisers
A radio advertising place is not guaranteed, and usually goes to the maximum bidder. Thus, your ads may be knocked off the air if you don’t fit the astronomical amounts which exist through an election. The same may happen during important shopping occasions, like around Thanksgiving and before Christmas, where major advertisers may buy up airtime to promote forthcoming earnings.
Special Occasions and Occurrences
There is an opportunity of prices changing depending on what events are occurring around town. This is because prices fluctuate depending on how many different people wish to advertise during this moment. For example, if there’s a highly contested neighborhood, state, or national election, campaigns tend to put money into local radio and TV at elevated rates.
To learn more on radio ad cost, view our in-depth manual to radio advertising expenses.
Best Stations and Times to Advertise
Best Stations to Market On
Among the first actions to radio advertising is deciding what channel (s) you want your ad to run on. You can use Radio Locator to see the channels that are located in your area, and the kind of genre they play.
Below are some general guidelines for targeting according to age from the direct response radio advertising agency, Strategic Media.
Targeting Radio Advertising by Age Group
| Age Range | Station(s) Most Listened To |
|---|---|
| Teens 12-17 | Mostly Top 40, some Urban, Alternative |
| Adults 18-24 | Top 40, more Alternative, Urban preference |
| Mothers 25-34 | Alternative, Rock, Top 40, a few Urban, Adult Contemporary |
| Mothers 35-44 | Rock, Adult Contemporary primarily |
| Mothers 45-54 | Oldies, Adult Contemporary |
| Adults 55-64 | Classical, New Adult Contemporary |
| Adults 65+ | Adult Standards, Classical, News Chat |
To find out the audience a radio station functions, only reach out to them and inquire. Most radio stations will have a contact person or department especially catering to customers who wish to market. The station should have a breakdown of the listeners based on the following criteria:
- Gender
- Age
- Revenue
- Location
When you have narrowed down that stations have an audience which matches up with the customer base of your business, you’ll get a clearer idea of what stations you will want to advertise on.
When You Need to Advertise & How Often
Radio channels divide advertising times into day components. You likely will not be surprised to know that the most popular times to run advertisements on the radio are throughout the morning and evening commutes. The various time slots you can Pick from are as follows:
Best & Worst Times to Advertise Radio
| Time Slot (aka Daypart) | Called | Desireability Level | Explanation |
|---|---|---|---|
| 6 AM – 10 AM | Morning Drive or AM Drive | High | Regarded as one of the two most desirable time slots for radio advertisers because of the high involvement of listeners. |
| 10 AM – 3 PM | Midday | Moderate | Many talk channels have a tendency to eliminate audience during this age. However, the shows of major talk personalities like”Rush Limbaugh” are situated within this very day part. Some music stations gain viewers as listeners utilize radio for background sound during work. |
| 3 PM – 7 PM | Afternoon Drive or PM Drive | High | A coveted period for advertising. Food and entertainment advertisers have a tendency to seek this time out for advertisements. |
| 7 PM – 12 AM | Evening | Low | Listeners are believed to be less responsive to radio ads during this time period. With the exception of 7 PM — 8 PM, the audience tends to be much more compact compared to the day. However, there’s an opportunity to get”deal” rates. |
| 12 AM – 6 AM | Overnight | Very Low | Considered the worst time to Market. Unless you are operating a 24 hour diner another business that caters to individuals who operate at nighttime, this time period should usually be avoided. |
You may choose to have your ads shown exclusively in a specific day place, or possess an equal distribution of your ads throughout the day. The second option means the radio station will change up what day and time your advertisement shows. The benefit of doing so is that you may acquire prime time advertisements for more affordable than you would if you opted to demonstrate all your ads throughout the summit slots. However, we suggest to go with the first option since ads are usually more effective when the same people hear that your ad multiple times. It’s simpler to achieve this when you run your commercial at precisely the exact same time every day.
Although morning and afternoon drive times receive your ad the maximum vulnerability, choosing the best time to market on the radio will be dependent on your company.
Here’s what Brian Colling, CEO of Colling Media, says about advertising times on the radio:
“The best run time really depends if your service is more of a want or a need. For people in the medical industry, lawyers, repairs like hvac, etc., we typically suggest Monday through Wednesday because consumers have a tendency to focus on what they”need to get done” earlier in the week.
For those from the’desire’ business like automotive, furniture, retail, etc., we typically recommend Thursday through Sunday or a Wednesday through Friday drive time with weekend rotators (6am-7pm).”
Determine the Amount of Your Commercial
Traditionally, radio spots are sold and priced based on 60 second commercial spots. But, you can purchase 30 second or perhaps 15 second spots.
Unlike television, a 30 second commercial does not necessarily charge half as much as a 60 minute commercial. By way of example, a 30 second commercial may be priced at 80 percent of the rate of a 60 second spot. This is because radio listeners often get less annoyed by the quantity of time that commercial messages take than by the amount of different commercials that are aired. (Here is excellent video excuse by Dan O’Day).
There’s a study by Dr. David Allan that indicates that 60 second advertisements are more powerful than 30 second advertisements. The longer commercial gives the advertiser an opportunity to tell a story and repeat their brand name and call to action more frequently.
Our proposal: Proceed with the 60 second commercial.
Pick How Often You Want Your Advertisement (s) to Perform
Frequency is the number of times your ad is heard by an individual person, whilst reach is the number of people that hear your ad. To put it differently, frequency is talking to someone a lot, whilst reach is speaking to lots of individuals.
Many men and women consider three as the magic number. If someone hears your advertisement three times, they are likely to recall your business. Though this isn’t scientific fact, it’s a good starting point for the small business when advertising on the radio.
As far as achieve, you wish to target people that are similar to a customer base. You can begin off by choosing one station that has listeners you think are consistent with your current clientele.
According to the Small Business Administration (SBA), high frequency over a brief time period is considerably more effective than low frequency within a longer time period.
This is only because you can hammer your message home to people when they hear it multiple times in a week. If someone hears your commercial multiple occasions over a 1 month interval, the message will not be as powerful because the listener probably will not actually remember hearing the message that the first time.
By focusing your advertising in one daypart and advertisements with good frequency (like three places daily Monday through Friday), you should be able to tell if this kind of advertising is working for your company.
The probability of course of the strategy is that you might accidentally pick a daypart that doesn’t work for your business and get a misleading reading as to effectiveness because of this.
Suggestion: Pick the daypart that’ll be most effective for your business, and try a program of 3 ads per day, Monday through Friday.
How to Produce a Radio Ad
There are a few Distinct options when it comes to creating your radio advertisement:
1. Have the station create the ad for you
Sometimes the station will offer to create your ad for you at no price. These stains can vary in quality from poor to excellent based upon the people working on the place.
If you go for this option, make certain you aren’t obligated to use the ad if it isn’t up to your expectations. Be wary as well since channels have an incentive to create your ad more pleasant to listeners by adding songs. While this might keep people from shifting the channel, it could dilute your message. You will also only be able to run this ad on their channel; you will either need to create your own ad for some other stations, or other channels might need to produce another ad for you.
If you decide to decide on this option, be sure that the channel is clear of what it is that you are looking for with your ad, and do not feel pressure to utilize the ad if it is no good.
2. Pay to get a professional radio commercial production firm
They can assist you with the script, choosing a voice, music, recording, and outcomes. Have them produce two different advertisement spots so that you will have the ability to test the potency of different messaging / approaches. You ought to be able to receive a great radio ad made for around $800 to $1200 each commercial.
We propose going with this choice, because you will get high quality ads which you are able to try out on various channels to see which works the best. This will improve future advertising efforts. For a more comprehensive explanation of radio advertising costs, you could also view our radio advertisements costs article.
3. Employ a freelancer
If you currently have your script, you can hire a freelance voice actor through programs like Fiverr to record your commercial for you. You can find professional celebrities for as little as $5, but just make sure to check at the reviews to determine which celebrities perform the best.
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4. Create the ad yourself
If you don’t have experience with voiceover acting, you probably want to steer clear of this choice. Conveying a message exclusively through sound is a challenging task, and normally should be handled by a specialist.
But recording your own voice is a good option if you want to produce a more personal message (e.g. I am the proprietor of Dave’s Pizza and also have a special offer for clients.) Just be certain that you have others listen to it to make sure it sounds professional.
Should you feel as if you have a voice for radio, make sure you don’t seem as if you are reading from a script and also prevent cliches. Even though creating your own advertisement will save you money at the brief term, if your ad is no good, then it will not drive any sales for your business in the long run.
Using the Radio Host to Publicize Your Business
When negotiating your advertisements handle the radio station, learn if reside reads of advertisements can be found. Rather than playing a pre-recorded commercial, the server or disc jockey will read from a script. This option has several advantages:
- Listeners tend to tune out commercials or change the channel when a commercial comes on. When the host reads, it’s a voice that listeners understand, and are more inclined to listen to it.
- The DJ / host will frequently ad lib a little together with the commercial, taking more than the 60 seconds that you purchased.
- Live reads may provide credibility to some product, implying that the host endorses the item. If you go for the live read, provide the on-air personalities using a free product or support so they can speak from personal experience.
The only disadvantage is that radio channels realize the good thing about this option, and so charge around 1.5 times the rate of a 60 second pre-recorded commercial. You are able to blend on your regular ads with live reads in order for your radio advertising budget to go further.
The Elements of a Good Radio Ad
Keep in mind that radio listeners won’t be listening to a advertisement in the exact same manner that you will. If you listen to your radio commercial to give your approval for it to be utilized, it’ll be in a quiet place with your whole concentrate on the radio ad. On the other hand, the audience for your commercial might only be partially listening to it or may hear only part of the radio advertisement. Furthermore, real listeners will likely also be engaged in a different activity, which means that you cannot ask them to use their own mind to consider your content.
This has a Couple of significant implications:
- You need to repeat anything that’s important several times throughout the advertisement.
- If you would like the listener to remember anything specific, like a promo code or phone number, you want to make it very simple. For telephone numbers, for example, a vanity number will probably work well (ex: 1-800-PLUMBER)
- If you are including your address, rather than stating 1234 Main Street, say in the corner of 5th and Spruce, directly alongside the high school. This work best for smaller cities where there are lots of recognizable landmarks.
- Stick to one message, and have a definite call to action of everything you want the listener to do in the end of the ad (i.e. call for a consultation, drive to your business, visit your site, etc.)
Here are a few more expert tips:
So as to have an engaging radio ad, David Burrows, Martin+Michael Agency, provides this information:
“Feature a dialogue between two individuals versus just someone reading a script. This has a much better impact as it seems more organic and interesting.”
Kelley Buttrick of KB Voiceovers also suggest sticking into a central message. She says:
“attempting to cram in selling point after selling stage after selling stage in to 30 or 60 seconds is like throwing a large bowl of spaghetti at the wall, not much will stick.”
Addressing your audience in the start of the ad also tends to do well at grabbing their attention (i.e. Hey, listeners!) . You want to start your ad off powerful so people will look closely at the rest of your advertisement.
For more advice about the best way best to produce a fantastic radio ad, see our article on radio advertising ideas in the professionals.
How to Assess the Success of Your Radio Ads
Assessing if offline advertising efforts are successful is considerably harder than measuring online efforts. However, there are a couple of tactics you can use.
Utilize a vanity URL
You are able to send visitors to your landing page on your website which has a URL that’s particular to your radio advertisements. This works particularly well if you’re offering a promotion that people may take advantage of by using the URL mentioned. For example, if you are running an ad on Sexy 995, announce on your wireless ad which people should visit www.yourbusiness.com/hot995. You will then want your own vanity URL to redirect to a tracking URL. Sadly, this will only be a handy measure of succeeding if you are working to drive visitors to your website. To learn how to do this, see this white paper by Brian Clifton describing ways to monitor offline advertising. You may purchase your vanity URL here.
Utilize a call tracking number
You can produce a number that is different from your everyday number. If someone calls your business using the tracking number which you use on your radio advertising, you’ll have the ability to track it back into your radio advertisement. Learn how to put this up here.
Ask your customers
If you can consult with clients one-on-one, ask any new customers how they heard about you. This will be trickier if you own a restaurant or clothing shop since you won’t be able to monitor every customer to inquire where they came out. In these examples, consider asking customers to have a questionnaire on every receipt. Provide an incentive (coupon, discount, etc.) to increase the chances that people will actually fill it out.
Quantify sales during advertisements period
The simplest way to find out if your ads are working would be to simply see if your earnings have gone up within the time period that your ad was running. Beware: you can not attribute in growth or decrease of earnings to your radio advertising with 100% accuracy. There might be other factors at play that are influencing your amounts.
By using a general idea of how well your wireless advertisements are working, you will know if you should continue marketing on the radio or in the event that you should shift your efforts to other forms of advertising.
Music Streaming vs Classic Radio Promotion
On-demand radio and music streaming services like Pandora and Spotify are growing in popularity. As per a study by Nielsen, on-demand streaming listeners rose by 62.4% in 2017 in comparison to the previous year.
Here’s a comparison of traditional radio advertisements with audio streaming ads:
Reach
Classic radio frequently cover a specific market, usually a town or a state. Meanwhile, the online music typically has an active user base that spans cities and states. By way of instance, Pandora has 81 million active users on earth, while the number of possible listeners for a radio station in Chicago is its own population of 2.75 Million. Online streaming solutions have an edge concerning possible reach, but remember that if your little business caters to a local market, not all Pandora subscribers are a qualified client for you small business.
Demographics
Based on Nielsen, radio reaches 90% of Americans in all age ranges. However, a study by LOOP states that online streaming services compose 51% of younger millennials’ (Ages 18-24) daily listening time. Although the numbers vary, if your business caters to the younger generation, it may be perfect to try out advertising with internet streaming services.
Targeting Ability
Very similar to other types of digital advertisements, online streaming services have strong targeting tools that radio stations simply do not have. Besides traditional demographics, Spotify can target people based on information like behavior, moods, and online activities. Review online streaming programs and sites, and check if it is possible to use their targeting options to better achieve your audience.
Cost
The best method to compare the cost of radio advertising and audio streaming advertising is through CPM or cost to reach 1,000 people. Radio ads normally have a CPM of $12 to $16, whereas audio streaming advertisements have a CPM of $5 to $30.
Ad Length
Radio advertisements are typically 30 to 60 seconds long. On the other hand, online streaming services such as Pandora and Spotify offer 15 to 30 second spots. This means your ads need to exhibit all very important data in half the time compared to conventional radio ads.
Ad Slot
As mentioned above, there are numerous daytime and primetime slots that you could target when performing advertisements on the radio. Since online streaming is on-demand, you won’t need to worry about promotion during a particular show or timeslot. Instead, you can concentrate on targeting your audience based on options provided by the streaming service like playlists and genres.
Additional Benefits
Online streaming permits you to add a photograph, like a company logo or product image, to your ads, something traditional radio is not capable of. In the same way, you can add a URL to your website right on a music app, which allows your viewers to swiftly act in your message.
Benefits & Challenges of Advertising on the Radio
Like every advertising medium, there are pros and cons to advertisements on the radio. Belowwe details about the benefits and challenges of wireless advertisements:
Benefits of Radio Advertising:
- Attain a Lot of people. Over 90% of Americans tune in the radio on a weekly basis, according to Nielsen. For that reason, it’s likely that your target audience listens to the radio and also will listen to your advertisement.
- Radio is a local medium. Many stations only play for a particular geographical location, which means that your regional business advertisement will only be discovered by potential customers in your region.
- Target based on tendencies. Not only can you target listeners by geographic area, but you might also target according to listening tendencies. For example, younger audiences tend to listen to the top hits channels, while older audiences are more likely to tune into classical and talk radio.
- Attain people who may spend. Over two-thirds of this weekly radio audience works full-time and listens to the radio through the commute and also during the workday.
Challenges of Radio Advertising:
- People are distracted. Somebody who is listening to the radio is probably doing something else when your advertisement plays (the driver is active driving, passengers in their phones, etc.). This means it can be tough to catch someone’s attention with your wireless advertisement.
- People are able to easily switch radio channels. There are hundreds of AM/FM radio stations that users can choose between while listening to the radio. Therefore, when a commercial comes on, they can easily change to another station.
- People are not spending as much time listening to the radio. To reach the whole audience of a radio channel requires more spots than tv. Television is sometimes called appointment screening. Viewers generally have the intention of seeing an whole series from beginning to end. On the flip side, radio listeners often tune in and out at different intervals. By way of instance, two individuals that listen to the same show while driving to work might never listen at precisely the same moment. Thus, a small company advertiser will need to advertise more often to reach everyone listening, and that can strain your budget.
Bottom Line on Radio Advertising
Despite the proliferation of on-demand services, radio remains a very strong medium to advertise to a broad range of customers and age groups. With a decent advertising and marketing budget and the advice detailed in this post, you can use radio to effectively boost your marketing strategy and bring more business ! Do not forget to visit Fiverr to discover a professional voice-over actor for your radio spot.
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