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Why Radio Works

For Advertisers

2006
Why Radio Works
‰ Radio is different from any other medium.
‰ It is a place 8 out of 10 people chose to visit every day, and spend over
3 hours each day with just 2 -3 radio stations.
‰ It’s a Virtual Neighborhood that lets people participate and feel as if
they belong.
‰ It’s the only medium that can talk, instantaneously, about what’s
going on that affects that Virtual Neighborhood, react and respond to
listeners and events on the spot – where they are engaged.
‰ It’s the only medium that offers the opportunity to participate and to
hear a human voice any time you want, 24 hours a day, 7 days a week,
where you know who lives there, what their values and interests are,
that they match your own.
‰ The changing natures of our lifestyles and technology have affected
the role radio plays in peoples lives, making it an even greater part of
most people’s daily routine.
Radio connects with people
It’s about Connection

“People relate to media in much the same way they relate to


other people. To feel involved, they must benefit from the
relationship. It’s about connecting, and it’s more difficult
than ever, because people are rejecting media that fail to
meet their specific interests and lifestyles.”

Mike Drexler
CEO
Optimedia USA
Adweek, February 9, 2004

Radio stations connect emotionally to consumers and


provide the opportunity for organic integration into the
“virtual neighborhoods” of radio stations.
Do people relate? Wirthlin says Yes.

“Radio and its Advertising are More


Personal and More Relevant to
People’s Daily Lives”
Radio Advertising is More Personal and
More Relevant to People’s Daily Lives

A study done by Wirthlin Worlwide recently compared consumers’


attitude toward radio, newspaper and TV. Their findings:
‰ When compared to television ads, radio ads are seen as being
more personally connected to the consumer.
‰ Radio listening is a one on one and emotion driven experience,
and listeners believe that both the medium and its advertising
are more relevant to them (compared to television and
newspapers).
‰ We also see…radio’s ability to connect with people emotionally.
When people cite radio ads’ greater association with honesty,
trust, and reliability, we believe consumers have a more
internal, more values-based relationship with the ads they hear
on radio.

Radio connects one-on-one


Source: 2004 Wirthlin Worldwide Study Findings Study conducted for Radio Advertising Effective Lab (RAEL) a
two-phase survey among adults 18-54: August 18, 2004
About cell phones…..
People call into the virtual neighborhoods
that they choose to be part of.

40.0%

35.0%

26.1%
23.2% 24.1%
30.0%

25.0% 21.4% 20.6%


18.0%
20.0%
13.2% 14.3% 15.0%
15.0%
10.3%
10.0%

5.0%

0.0%
Used Cell Phone to Call A Radio Station While Used Cell Phone To Call A Business In Response To Ad
Driving/Riding In Car Heard on Radio

Adults 18+ Hispanics 18-34 Women 25-54 Adults 25-54 With HHI $75K+ Men 25-54

Source: Arbitron Edison NAB In Car Study October 2003.


Base – Use cell/car phone
Radio Can Improve Advertising ROI

‰ The Radio Advertising Effectiveness Lab


(www.radioadlab.com) has a collection of studies
that illustrate how adding radio to an ad
campaign measurably improves its effectiveness.
‰ Advertisers who use radio tell us the same thing:
“Radio makes all other media work better.” (Tom
Burney, Jiffy Lube Owner)

Radio brings advertisers into


the Neighborhood.
Unaided Brand Recall

2 TV/Newspaper ads vs.


1 TV/Newspaper + 2 Radio Ads
Radio groups indexed to No Radio groups
280
Recall Score Indices

300
250
200 134
100 100
150
100
50
0
TV & Radio Newspaper & Radio

No Radio With Radio


(Approximately 100 respondents per group)

Source: PreTesting Lab Study released December 8, 2004 by the


Radio Advertising Effectiveness Lab (www.radioadlab.com).
Radio Can Influence First-
Choice Brand Selection

2 TV/Newspaper ads vs.


1 TV/Newspaper + 2 Radio Ads

+8
+5 pts
Pre/Post Shift in #1

8 +6
Preference Pct.

6
4

2 -1
0
-2
TV & Radio Newspaper & Radio

No Radio With Radio

(Approximately 100 respondents per group)

Source: PreTesting Lab Study released December 8, 2004 by the


Radio Advertising Effectiveness Lab (www.radioadlab.com).
…and is it likely to work?

Absolutely.
The listeners have told us that.
Radio Listeners React to Advertising

“While listening to the radio while in a car, have you


ever heard of a sale or special that motivated you to
visit a certain store…?”

64.6%
51.9%
Later That WEEK
55.9%

51.8%

55.8%
Later That DAY
46.6%

Adults 18+ Hispanic Adults 18-34 Women 25-54

% Saying “Yes”
Source: Arbitron Edison NAB In Car Study October 2003.
Real Relevance
Seventy-nine percent say radio commercials are
“always” or “usually” or “sometimes” informative.

Always/Usually
Informative
22.0% Sometimes
Informative
57.0%

Rarely/Never
Informative
19.0%

Don't Know/No
Answer
2.0%

Source: Arbitron/Edison Media Research, “Spot Load Study 2005: Managing Radio
Commercial Inventories for Advertisers and Listeners,” Persons 12+.
Here’s where V/S says we’ll spend our media time.

Hours Using Media Per Person


Number of Hours Per Week
25.0

Radio
20.0

Cable/Satellite TV

15.0
Television

10.0

5.0
Internet
Newspaper
Video Games
0.0
1999 2000 2001 2002 2003 2004 2005* 2006* 2007* 2008* 2009*

Source: Veronis Suhler, August 2005, Communications Industry Forecast


*Hours are projected.
Strategic Advantages

‰ It is the most time-flexible of any of the media. That gives


advertisers strategic advantages -- the opportunity to react
instantaneously to sales and marketing opportunities.
‰ It has one of the lowest production costs of any medium, so
advertisers can try multiple executions of messages without
blowing out the budget (average cost of radio spot ranges from
FREE to about $5,000 to produce) (average TV spot is $335,000,
according to AAAA in 2003).
‰ Good radio advertising never stops working. It sells your business
today while still building business for tomorrow.
‰ It gives your client a personality and makes it credible, comfortable
and familiar to your potential customer.
‰ Radio works with other media and improves both the response rate
and the efficacy of the advertising.
‰ Radio reaches people who don’t know they’re looking for a product
or service—yet.
TOMA -- Top of Mind Awareness

‰ A company called TOMA© surveys consumers in medium to small


markets around the country looking for “Top of Mind” leaders in
various categories (plumbers; mattress companies, etc). They
found there are either one or two leaders with 40% to 60%
mindshares, or a single leader with typically a 70% mindshare, or
no leader and all competitors had 3-4% shares of mind.
‰ According to TOMA research virtually every one of the leaders
devoted 50% or more of their ad budget to radio and used radio
regularly.

Radio generates Top of Mind Awareness


The fact is…
RADIO is
the most possible of media
in our daily lives.
This is how people are spending at
least 28% their media time every day.
Are you using it to your best
advantage?
Brought to you by the radio
stations of the

Southern California Broadcasters


Association