Advertisers value local radio for its ability to reach massive audiences of engaged listeners. AM/FM radio is America's most popular media, reaching 92% of Americans 18 and older weekly, and it's the most listened-to audio source.
Today's combination of AM/FM radio and digital streaming can help nearly every business achieve its marketing goals. But how do you measure the success of your campaign?
Along with a growing toolbox of measurement tools, radio delivers on the most common key performance indicators (KPIs), which are the objectives advertisers aim for in an ad campaign. The four most common metrics are reach, engagement, frequency, and return on investment.
Local radio delivers big on these four essential KPIs.
No. 1: Reach
This metric refers to the number of listeners who will hear your radio campaign. Radio stations calculate reach by measuring the number of listeners exposed to an ad during a given time. The more listeners who hear an ad, the larger the reach.
Third-party measurement services, including Nielsen, supply stations with data on reach, and next-generation advertising tools can help pinpoint where and when listeners hear a spot.
When advertisers message across AM/FM stations and digital streaming, it amplifies reach and creates additional opportunities to measure exposure. For instance, if an advertiser sponsors a contest on the radio and the ad instructs listeners to go online to enter, that business is engaging listeners on multiple platforms, extending their exposure and further reinforcing their messaging.
No. 2: Frequency
As America's no. 1 reach medium, radio offers advertisers a massive megaphone to connect with listeners. The more times a consumer hears the message, the better.
In marketing, the "Rule of 7" is a time-tested strategy that contends consumers need to be exposed to a message seven times before they take action, from visiting your website to making a purchase. Repeated exposure is also known as advertising frequency.
Frequency is essential because it helps a brand build familiarity and trust with the audience. Most consumers are reluctant to give their hard-earned dollars to an unfamiliar business.
To earn that recognition, an advertiser needs to commit to a consistent radio schedule. The ideal campaign length varies by advertiser and their objectives, but here are a few guidelines:
Short run: two to six weeks to build buzz for a limited goal, such as a sale, event, or promotion.
Medium run: A four- to 12-week campaign establishes familiarity and brand recognition for current and future engagement.
Extended run: When a campaign airs for several months or more, it creates a lasting relationship between the audience and the advertiser. Sponsorships are a great way to establish a long-term connection between a station, its audience, and a business.
Whatever your business goals, you'll know your frequency hits the mark when you can attribute conversion to the campaign.
No. 3: Engagement
Here's a simple way to calculate your campaign's success: How many listeners take action or engage after hearing your ads? Some of the most effective radio ads offer listeners an incentive, such as a promo code or special offer, that they can only receive by acting. These promotions motivate listeners to become customers.
A campaign's call to action can range from calling a phone number to visiting a website or using an offer code during online checkout. Whatever the hook, the call to action prompts audiences to engage with the brand.
The most impactful call to action should reflect your campaign goals. Want listeners to explore your website and make purchases? Send them to your website (at Federated Media, we can track website traffic after your radio spots air using an attribution tool called Rumple). Looking to boost sales of a particular item or during a period? Offer a limited-time promotional code.
Contests are another great way to motivate listeners to provide their email addresses or phone numbers in exchange for a chance to win prizes.
Advertisers can measure their engagement by tracking actions tied to their desired outcome, including web visits, bookings, or sales. For example, if an HVAC company runs a two-week radio campaign offering a discount code for furnace repairs, the company can track how many customers call or book online services with the promotion. If bookings spike, the campaign delivered on an important KPI.
No. 4: Return on Ad Spend
Return on ad spend, or ROAS, is a critical KPI because it determines if your campaign money was well spent.
Here's the basic formula to calculate ROAS:
Revenue ÷ Ad Spend = ROAS
For example, if a business spent $10,000 on radio ads and earned $40,000 in attributed sales, the ROAS would look like this:
$40,000 ÷ $10,000 = 4 (or $4 for every $1 invested)
In general, if a campaign delivers triple the investment, the return on ad spend is considered a success.
When it comes to measuring the ROAS on a radio campaign, a business should work with its radio partners to establish the campaign objectives and metrics for success. For example, if the goal is to boost sales on a particular product or service, the campaign can offer a promo code for customers who book online. When a customer uses the code, the business can directly attribute that action to the campaign spend.
Similarly, businesses can monitor web traffic and phone activity during and after the campaign runs to correlate exposure to actions.
If an advertiser includes digital media, such as radio streaming or the station's website, in their ad campaign, it expands the ROAS attribution options. With digital media, a radio station sales team can track exposure and activity back to the user, providing more detailed information on consumers and actions.
By combining radio and digital, an advertiser can turbocharge their ROAS. For example, if a business sponsors an online giveaway, the number of contest entries helps establish the profitability of the return on ad spend.
The Bottom Line: Radio Delivers on Key KPIs
When it comes to KPIs, local radio and digital advertising offer businesses more options than ever to reach engaged audiences and achieve campaign goals.
Federated Media's marketing specialists can help design a multi-platform campaign that activates local radio, digital streaming, and our web channels, allowing marketers to optimize reach, frequency, engagement, and ROAS for the most effective campaigns.
