In an age where Americans have more media choices than ever, local radio remains a favorite. Recent studies show that Americans still spend a significant portion of their day with AM/FM radio—two-thirds of their audio time, to be exact.
Younger consumers spend about half their audio time with local radio and older adults devote as much as two-thirds to AM/FM stations. That translates to an enormous megaphone for your local business’ advertising message.
And while local radio has always been a popular choice for local advertisers, businesses are under pressure to measure the results of their spending. From digital advertising to video and social media, there are more marketing choices than ever, but radio is still a wise – and fruitful – investment. According to Nielsen, radio is a “top-tier medium” for advertiser return on investment.
Calculating the ROI of your radio campaign has never been easier—or more precise.
Gone are the days of waiting until after a campaign ends to measure success. Today’s radio advertising can be tracked in real time, allowing marketers to adjust strategies mid-flight and analyze results in granular detail after the campaign wraps.
Define Your Campaign Goals
A huge part of that analysis is determining the return on your investment, so let’s break down that process. To start, a local business should establish campaign goals to define how you’ll calculate the effectiveness. If the ad directs customers to a website, you can track web traffic and online purchases. A call-to-action message should drive visits to your store and purchases, or a campaign can boost sales and engagements during a window of time.
Next, it’s time to add up the campaign expenses, including creative costs, talent fees, and ad placement and packaging.
Calculating Return on Investment
Now that you’ve set your goals and gathered the necessary information, let’s look at how to calculate your return on investment. Here’s a quick formula:
- Calculate the revenue attributed to the campaign.
- Tally your advertising expenses.
- Subtract the costs from your revenue.
- Divide that by the cost of the campaign
- Multiply that figure by 100.
The final figure is your ROI for that radio campaign.
Additional Benefits to Your Business
Along with financial benefits, a radio campaign also helps build your business’ reputation and customer loyalty. Radio is an excellent vehicle to build brand awareness, which nurtures brand engagement, conversion, and loyalty — all key to a successful business.
Federated Media uses an attribution tool called Rumple, which tracks website traffic for 30 minutes after each time a business’s radio commercial airs. Our monthly reporting shows the impact of radio commercials immediately after they broadcast, which can help with calculating ROI.
Ready to see how you can boost the success of your radio ad campaign? Federated Media’s marketing specialists can help optimize your radio advertising budget and craft campaigns that maximize your spending and generate strong results. Contact us to learn more about our robust radio advertising options, including ads on broadcast radio, streaming radio and podcasts.
