Is there a general return ratio in radio advertising?

  • How many calls should you expect from a radio campaign (let’s say out of 100,000 or 1,000,000). I know “it depends” … but I am sure there is an average? LinkedIn Question by: Oren Yehezkely

Normally there are several factors that would restrict you to put a ratio expectation to your Radio advertising. Some of these factors are: campaign period, frequency of appearance, number of channels, reach of channels, competitive clutter, creative standard, mode of delivery, whether spots or sponsorships, whether call in programs or just spots, etc. etc. – the list is really huge!

In the simplest sense, let’s say you want to spend on only one channel, for a 4 week period within a prime time program. Without going into the costs, I’d say that your best chance of getting maximum effectiveness would perhaps be to concentrate on a call-in program that involves the listener to take part in the program while being told that the caller might win prizes courtesy your brand, or caller may answer questions about your products – which were perhaps talked about within the program itself! Therefore it becomes a “give and take and recall” kind of relationship.

In this type of scenario, the responses could be quite high. But again, without any numbers background (eg. target numbers, reach numbers, etc.) it would really be difficult to quantify the ratio.

In general, there’s no hard and fast “rule of average returns” in any kind of advertising – leave alone radio! The reason: an ad’s response rate, returns and overall success depends of multiple factors, all of which are not controllable majority of the time – esp. in case of mass offline media. Having said that, one can design a small-target focussed campaign using various response-based ad formats, where some minimum amount of responses are considered as “decent” or “threshold”; e.g in Direct Mailer advertising, Online advertising, Direct Response Coupon Based Ad, etc.

Concluding, therefore, a fixed ROI is not available for radio advertising – even though there are plenty of ways to have a meaningful return from Radio as well as other media.

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How to measure ROI on branding and image advertising

  • How do you measure ROI on your branding and image advertising? Please describe the tools, and formulas you are currently using to measure ROI on your offline advertising. LinkedIn question by: David Jacobstein

Let us understand the perspectives on this first. We need to understand what do we actually mean by ROI:

(a) did we literally mean mean to say Return On (our) Investment?

(b) Or did we just use it colloquially to mean just “Returns” from or “Effectiveness” of our branding and image advertising?

In case it’s (a), we must understand that ROI from Branding and Image Advertising usually is not realized immediately. Usually we can see the change after 2-5 years of doing the activity – even though exceptions could be found esp. in case of brands launching new/ innovative products or ideas (eg. Apple, thanks to it’s products since iPod). More often we see that a flurry of innovative product campaigns from “branded house” brands (eg. Samsung), improves Return on (Communication) Investments over short term. In case of the other extreme – ie. the House of Brands (eg. P&G) – there’s more propensity to equate ROI to the Sales growth – even though the dollars might have been spent in branding or image advertising.

In case it’s (b), then we need to question the very basis of of our activity, which will give us answers. What motivated us to do the activity? What are the objectives of the campaign? Are we trying to increase visibility? brand recall? point-of-sale recall? change attitudes? or preferences? develop new habits? change negative to positive? developing a personality for the brand? etc. etc. – the list could fill up many lines here! If we have your objectives laid down, then we would definitely have some reference points to those objectives – eg. in case of brand recall, we might start off with 25% current spontaneous recall that need to be increased to 40% with 5% flexibility. In this case, a “before-after” comparison would give the ROI indications. Similarly, if we perhaps plan to do an image campaign to increase total awareness (aided + unaided), and implement thru extensive outdoor visibility, we might consider “before-after” method again to ascertain ROI.

Therefore, to answer the question:

In general, every image advertising / branding campaigns aim to strengthen / improve upon the rational and emotional values associated with the brand. These values are usually identified and graded through an elaborate process of qualitative and quantitative research tools. Once done, key improvement areas are identified for a branding / image campaign and suggestions given for probable communication solutions. Additionally reference points for these values are created for comparison – empirically or numerically. Once the campaign is developed, it’s pre-tested to see if it addresses the concern areas identified by research. If yes, then the campaign is launched, and a second exercise is done thru the same elaborate process, after concluding the campaign. If the results match the objectives, the campaign is said to be “effective” or labelled as “successful”, giving good ROI.

A note of caution however; if the ROI=Sales growth, some campaigns might sometimes give excellent results, even though the results could hide sensitive factors or problems that might chip off brand value in the long-run, resulting in brand failures.

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