Study: Amid high-tech options, radio ads can benefit CPG companies
A recent study by Nielsen Catalina Solutions found every $1 spent on radio advertising returned $12 in CPG sales, Adweek reported. The study was commissioned by the radio network Westwood One, which Adweek noted established a guaranteed return on investment program for its advertisers last fall.
The research company, a joint venture with Nielsen and Catalina Marketing, compared purchasing data from more than 90 million households with retail sales information. Then it added in Nielsen Radio Ratings data with the purchasing data to get a better feel for how listeners might have heard the information and what they did with it, if anything. "Heavy category buyers" responded the most to radio ads, resulting in 8% more sales of a CPG product, the study reported.
Pierre Bouvard, Westwood One’s chief insights officer, told the publication in October that CPG brands such as Procter & Gamble and Unilever had recently contacted the network looking to return to radio advertising following a few years of using other media.
Radio has traditionally been viewed as a cheaper ad buy because production and run costs are usually lower than television or print. However, it can be hard to tell how many ears are hearing a product pitch without solid data.
Radio advertising, along with TV and print, began to falter as web display and video ads on social media channels took hold and began to dominate industry marketing budgets. However, that approach won't work for all audiences since plenty of people continue to listen to radio at work, at home and in their cars — during that time, they're virtually a captive audience unless they change the channel.
According to Nielsen data reported by Business Insider, about 93% of U.S. adults listened to the radio in some form once a week or more during the last quarter of 2016. TV was next with 89%, while smartphones had 83%. The data indicated that most of the increase in radio listening was occurring in cars.
Now that internet users can stream their favorite radio stations online via smart phones and laptops, advertisers can have the best of both worlds. Of course, retailers and manufacturers also can reach their audiences with targeted ads, coupons and newsletters delivered via smart phones and laptops by using demographic data gathered through analytics.
It takes sophisticated segmenting and evaluating to break out which advertising approach — or combination of them — is going to be the best fit for CPG companies. Does it work better to use morning radio drive time to pitch snacks and lunch items and then evening drive time to focus on dinner suggestions like meal kits? Or would it make more sense for brands to wait until the end of the week to email and text coupons to families who will be out doing most of their shopping on the weekend? It's likely to depend on the product and its intended audience whether radio advertising makes the most sense, and to what extent.