Suppose you woke up one morning and found a 100-year-old machine in your basement. You soon discovered that every time you put a dime in the machine, one dollar came out. How many dimes would you drop in that machine?
Good news for Fayetteville small business owners: such a machine exists and you probably have one in your car, at work, at home, even on your phone. It's called local radio.
Over the past few years, Nielsen has conducted over 20 studies to determine what type of return-on-investment (ROI) a business can expect from radio advertising. Although the results varied by industry, the average company generated $100 in sales for ever $10 invested. Turning dimes into dollars.
The chart below shows the range of returns from each study.
AdAge, a trade magazine for advertising professionals, calls these types of return "eye-popping". The magazine goes on to say radio's ROI is superior to commercials on TV, online, and social media.
One of the reasons radio advertising delivers such impressive returns is the medium's dominant reach.
Last week, for instance, significantly more consumers tuned-in to Fayetteville radio than watched local TV; read a newspaper; or who logged-on to Pandora and Spotify.
According to Nielsen, reach is the most important media consideration for driving sales. It is more important than branding, targeting, recency, or context.
Radio commercials have also proven to be very effective in producing unaided message recall at time of purchase. A Fayetteville consumer can only buy something from a company they can remember. This can have a profound effect on ROI, as well.
Local Ad Recall, a research company that measures the effectiveness of advertising, found that brand recall was five times higher for companies that advertised on radio versus the companies that did not.
Local business owners have always known that they can expect impressive returns-on-investment when advertising on Fayetteville radio stations.
Cape Fear Flooring in Fayetteville started out as a carpet cleaning company 19 years ago operating out of a tiny house. This year, the company moved into a brand new, 6000 square foot showroom and warehouse along with their 28 employees.
“We began advertising on Fayetteville radio in 2000, a year after we opened,” remembers co-owner, Amie Crouter. “We had just expanded into water mitigation a few months earlier. I had just set up an account with Mohawk, one of the largest manufacturers of floor coverings in the world. And, we had just sold our first flooring job even before we had hired an installer.”
After 18 years, Cape Fear Flooring still advertises on Fayetteville radio. “Radio advertising has really driven our growth from the beginning,” says Ms. Crouter. “We have always asked new customers how they found out about us. Overwhelmingly, we are told they heard our radio commercials.
“Since we started advertising on the radio, we’ve never stopped,” she says. “Advertising on Fayetteville radio has provided an excellent return-on-investment for us.”
Joe Quigg began advertising on Fayetteville radio shortly after buying Ed’s Tire and Auto Service from the original owner, Ed Melvin.
“Ed, who served as my mentor for the first few years, had been huge in yellow pages and newspaper advertising,” says Mr. Quigg. “He feared that if we quit advertising four days a week in the newspaper, then the world would end.
“I knew, though, that advertising on Fayetteville radio was right for us,” continues Mr. Quigg. “When I was in corporate sales, I was spending a lot of time in the car. My radio was always on. So, I knew it could reach the customers of Ed’s Tire.”
As his advertising strategy began to show positive results, Mr. Quigg stopped newspaper advertising altogether and started adding more Fayetteville radio stations into his mix.
“Every week that goes by,” says Mr. Quigg, “five or six customers tell me they came in because they heard us on the radio.”
“When it comes to spending money, I am very conservative,” continues Mr. Quigg. “I don’t like spending money I don’t have to. Our sales have grown every year since I have owned the business. Radio has been a big spend for us, but it has also been a big part of our growth. I wouldn’t be willing to do without it.”
After seeing the results of Nielsen's ROI studies, media expert Doug Schoen wrote in Forbes Magazine, "I found this data nothing short of fascinating. It’s quite clear that we should all be paying more attention to radio, its reach and potential to help our businesses. It’s doing the job with expert efficiency.”