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Why Warren Buffett Is The Biggest Advertiser on Fayetteville Radio

Written by Larry Julius | Jan 11, 2019 12:43:00 PM

Warren Buffett is worth $84-billion dollars. Forbes magazine calls him "one of the most successful investors of all time."

In 1996, Mr. Buffett invested in GEICO and folded into the stable of 60 companies he owns. Today, it is the second biggest auto insurance company in America.

If you were one of the 288,946 consumers who tuned-in to a Fayetteville radio station last week, you most likely heard a GEICO commercial. That's because nobody invested more in radio advertising last week than GEICO.

Why would the third richest man in America invest so heavily in radio advertising?

Mr. Buffett's wealth has been built on investing in value, not by chasing what he calls, "the next big thing." He only invests in opportunities with strong fundamentals.

The fundamentals of a successful advertising campaign are the "three-Rs", Reach, Recall, and Return, no other medium delivers the fundamentals as effectively and efficiently as advertising on Fayetteville radi0.

REACH

The first “R” is Reach. According to a study by Nielsen, after the actual content of the commercial message itself, reach is the most potent advertising element that can drive sales. Reach is more important than brand, recency, or even context. Fayetteville radio provides local business owners with the biggest reach among consumers.

Percent Sales Contribution by Advertising Element

Last week, 288,946 adult consumers tuned to their favorite Fayetteville radio stations. This is significantly more than the 181,951 consumers reached by area TV stations or the 182,061 reached by local newspapers.3 Fayetteville radio reaches everyone. Unlike other local media, which tends to skew towards older audiences, Fayetteville radio reaches consumers of all ages. This includes members of Generation X, Y, and Z; Millennials, and Boomers. Everybody.

Percent of Fayetteville Consumers Reached Each Week By Radio

Media expert, Gordon Borrell, CEO of Borrell Associates, advises, “Everything we’ve read about listening and aging audiences would have us believe that only our grandmother is listening to radio. Turns out the industry’s biggest supporters, the radio advertisers who foot the bills, aren’t buying that at all. Radio works, and the listeners are telling us in the latest survey data that radio has one helluva return-on-investment.”

RECALL

The second “R” affecting advertising success is Recall. To be effective, advertising must be remembered by the consumer when it comes time to choose which Fayetteville business owners to patronize.
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. Consequently, Fayetteville small business owners who advertise on radio have a much better chance of being recalled and, therefore, frequented by prospective customers than companies that do not advertise on radio.

Consumer insight company, Nielsen found similar results. Across several different business categories, on average, radio advertising improved recall by 82%. The businesses measured were a health and beauty company; an information technologies company; an auto aftermarket retailer; a motorcycle company; and a mobile app company.

Unaided Brand Recall


Radio Ad Recall

RETURN

The third “R” of advertising success is return-on-investment (ROI). ROI is a measurement of revenue growth that a Fayetteville business owner can expect for each $1 invested in advertising. According to Advertising Age Magazine, when executed correctly, radio advertising can deliver a greater ROI for a local business than investing in TV, digital, or social media ads.
Over the past few years, Nielsen has conducted more than 20 studies to determine how much ROI a business owner could expect when advertising on radio. In every case, radio’s ROI was, in the words of Advertising Age, “Eye-popping.”

The most recent ROI study released by Nielsen is no exception. According to Westwood One, the company that commissioned this latest study, a radio campaign for a men’s personal-care brand produced $11.96 in sales-lift for every $1.00 invested in radio advertising.

Overall, according to Nielsen, among all of the studies conducted, radio ads produce a very impressive 10x return-on-investment.7

Radio Advertising ROI by brand category


Doug Schoen wrote in Forbes Magazine of radio’s ability to deliver the “3-Rs” of advertising.

“The implications of results like these are profound for the communications and advertising industries,” Mr. Schoen said, “and as a marketing professional with over 35 years of experience, 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.”

Fayetteville Small Business Owners Agree

“I can testify,” says Carolyn Barbour, “our radio advertising has created lifetime customers for our company.” 

Ms. Barbour and her husband Tony own Budget Rooter, a Fayetteville based plumbing company with a long list of commercial, residential, and industrial customers. “We’ve tried other forms of advertising,” continues Ms. Barbour, “but they have all failed us.” 

At a recent Plumbing convention, an industry consultant suggested to the Barbours that radio advertising might not be the most effective way to advertise. “No, no, no,” Ms. Barbour told him. “For us, radio is tried and true.  When people in Fayetteville have an urgent plumbing problem, because of our radio advertising, we are the only name they know.” 

“Not too long ago,” says Ms. Barbour, “One of our competitors who, sadly, went out of business during the downturn, told me he wished he had listened to my advice when he asked me 'is radio advertising effective?' He might still be around today.”

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