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11 Jan

What ROI can I expect from radio advertising?

This is a question that we’re often asked when working through creative ideas for a radio campaign. How well do we think it’s going to work? What can we expect from the campaign, and how far should we push the creative & spend?

And they’re fair questions – when planning a marketing campaign, advertisers are faced with more and more choice and some tough decisions about where and how to allocate their budgets. With new platforms coming online all the time, often radio can be overlooked in favour of more fashionable choices. Some brands are choosing to increase social media budgets despite the uncertainties and continual debate that surrounds what ROI these channels can bring to a campaign, often at the detriment of more traditional media like TV and radio.

Radio’s effectiveness (the multiplier effect) within the media mix has always been visible though two decades of RAB research, but what was missing, up until now, was definitive ROI figures giving advertisers a clear indication of the results they could expect from their radio campaign.

In an attempt to persuade advertisers to reconsider the proportion of budget allocated to radio, RadioCentre commissioned a study which evaluated radio advertising effectiveness specifically looking at ROI. The study was twelve months in the making and was based on ROI data provided directly by all major media agency groups, covering over 2,000 individual media campaigns across ten major sectors.

The study, called ‘Radio: The ROI Multiplier’, showed that on average radio advertisers get their money back 7.7 times over. As expected some categories, including automotive and retail brands, show exceptional performance. This makes radio the medium with the second-highest return on investment (TV is first), out-performing press, outdoor and online.

When the creative analysis from RadioCentre’s radioGAUGE study is included, the radio campaigns which out-perform the average have standout and a clear message. And when it comes to media planning, it’s coverage rather than frequency that boosts the ROI of a radio campaign.

Another interesting finding from the ROI multiplier study was the effect the different levels of radio spend have on the overall effectiveness of a campaign. The research showed that allocating more spend to radio resulted in a higher ROI return for the overall media campaign, not just the radio element.

Currently radio is allocated 6% of all advertising budgets, but this study shows that if a higher proportion of budget were allocated giving radio a 20% share of the total spend – the total campaign ROI would increase by over 8%.

For the top 100 radio advertisers, this translates to an additional £1.4bn return on their investment. Simply by tweaking a media plan! To find out more, click here to download the full study here, and if you have any questions about the research or want to know more about getting the best ROI possible from your radio campaign, do get in touch.

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