How Radio Won the Super Bowl
The year was 1984. Hollywood director Ridley Scott had just released Alien and Blade Runner and was called upon to helm the production of a Super Bowl ad for Apple Computers. The concept was based on the book 1984, by George Orwell, and in the thirty years since that iconic ad aired, advertisers have spent millions trying to replicate the results.
Mostly, it's been a losing bet. While thirty-seconds of ad time during the Super Bowl costs four million dollars, a study by Communicus Advertising Research, cited in the January 6, 2014 issue of Advertising Age, estimates that 80% of Super Bowl ads have little or no effect on sales.
This year, however, a new player entered the field: clickable radio. While Jerry Seinfeld and his cast-mates reunited and a host of heart-tugging puppies strutted their stuff on TV, this relatively new audio recognition technology increased radio audience engagement by over thirty-percent for some advertisers.
The basis for the technology is to make radio more relevant and interactive by driving the call-to-action to mobile devices. Listeners point their devices toward the radio and push a button to "clip" the sound from the speaker to the smartphone. From there, an app determines the station and offer, allowing marketers to provide prospects with hidden content, promotions and purchase methods. Once the ad is clipped, it remains in a tag list, so that listeners can return to and/or share it with others.
Right now, the biggest players in this growing industry are Westwood One (in partnership with SoundHound) and Clip Radio. In order for Clip Radio to work, it requires special equipment to be installed in the broadcast area, so their foothold is in a relatively small number of markets. However, Westwood One's SoundHound capability is already available to 225 million listeners. SoundHound's Vice President, Katie McMahon, estimates SoundHound's mobile app at 130 million worldwide. Both free and premium (paid) versions of the app are available to users.
The cool-factor of this marketing technology is undeniable, and so are the results. Inside Radio reports that both Wal-Mart and Geico have taken advantage of clickable radio. In the case of Geico, its SoundHounded 2014 Super Bowl campaign saw a 31% increase in prospect engagement over their 2013 campaign (which did not use clickable radio). With that kind of outcome, it's no surprise that Geico is planning to continue their campaign beyond football season, and other marketers are following suit.
Not only does clickable radio provide a new source of profits for direct response and brand response radio advertising, it also provides a built-in measuring system. This includes the ability to report on how many listeners "clipped" an audio ad and took action. Alpha Broadcasting's Senior VP and Market Manager, Milt McConnell states that, in many cases, "This is brand new money." For marketers who haven't tried radio or have focused their efforts on other media, this is a fact that cannot be ignored.
Thirty years ago, Apple won the battle for iconic television commercials because, at the time, the format was unique and original. Every Super Bowl commercial since then has attempted to reproduce those results by also being unique and original. But with creativity trumping marketing prowess, it's mainly been a lot of cute mini-movies that may even go viral but don't actually prompt target audiences to take action. Meanwhile, clickable radio is coming up fast on the sidelines, delivering tangible value to listeners and, consequently, making a whole lot more touchdowns.
The Mythical Battle between Brand Advertising and Direct Response
Brand advertising creates loyalty. Direct response makes the phone ring. But are they really incompatible?
Certainly, there are times when these two sales models can seem to be at cross-purposes. Let's suppose, for example, that you sell luxury cars. The direct response model would tell you that targeting a young woman in law school, who can barely pay her rent, would not be your best approach because she isn't in the purchase-consideration funnel. The brand advertising model would tell you that someday that law student is going to have the money to buy a luxury car, and she'll want to be familiar with the brand beforehand. In this case, it makes sense to allow for a longer, brand-oriented sales cycle than direct response would provide.
When the product or service is right, however, brand advertising and direct response not only coexist peacefully, but they can produce results that are significantly stronger than when one sales model is used on its own. This is where "brand response" comes into play. This benefit-driven model develops a qualified database while also building loyalty and establishing a company as a trusted advisor within its industry. In radio, brand response sounds like this: storytelling that communicates brand benefits along with a compelling offer. This kind of advertising connects listeners with the values of the product or service for the long-term, while remaining measurable and trackable. It's an approach that recognizes that, at any particular time, prospects are at varying places in the sales funnel. The messaging is designed to address each one, without letting qualified prospects fall away.
But if luxury cars are likely off the list of viable brand response products, which ones can benefit from this model? The most important guideline is that it should be a product or service that is useful and has clear and compelling brand-benefits. Let's take a cruise line, for instance. At first glance, one might think: A luxury cruise is like a luxury car, so it couldn't possibly benefit from brand response. But here are some of the reasons why it is a strong candidate: cruises are useful in that they provide a menu of relaxing and entertaining experiences with minimal planning required (just show up and be pampered). While it might not be something one would consider without advertising, cruises are affordable for much of Main Street America (with perhaps a little help from Mom and Dad, even that law student may be able to celebrate her graduation on a cruise to the Mediterranean). Cruise lines know how important it is to build a name associated with safety, fun, and elegance. And there is ample opportunity for cruise lines to create unique offers ("call now and get $250 off your next cruise"). It takes a thorough evaluation to determine whether any given product or service is right for brand response, but when a match is made, such as this, the payoff can be substantial. A skilled team can then build a brand response campaign that will simultaneously enhance the brand and gain qualified prospects.
So, why aren't more companies taking advantage of the brand response model? Well, different sized companies tend to have different answers to that question. Larger companies often have separate teams for brand management and direct marketing efforts, creating a sort of organizational conflict when it comes to cross-channel creative. This is why larger companies can sometimes use the perspective of an expert third-party. In turn, small or mid-sized businesses often try to emulate the marketing techniques of bigger companies (just on a smaller scale). For a company with a limited budget, it can be intimidating to justify investing precious resources in a method that isn't being employed by the "big guns." Yet, it's the small to mid-range companies that are often the ones best positioned to integrate separate media and creative forces, since the people focused on branding tend to also be the ones focused on marketing.
An example is Dell computers. While Apple and HP were duking it out in the retail market, Dell's relatively small marketing department quietly took a foothold in brand response. The company offered a concrete call to action while also building its "Easy as Dell" brand. Dell could have strictly invested their advertising budget in the tried and true methods used by its much larger competitors - and, in doing so, they very likely would have been swallowed up. Instead, they grew a multi-billion dollar enterprise by recognizing that brand response can create an effect much greater than the sum of its parts.
The bottom line is this: while brand response is not for every situation, it can and does create a synchronicity between building awareness and sales conversion. Brand advertising and direct response both play to their strengths. Brand response allows for the perfect handoff.
Holding Onto Marketing Data during Times of (Business) War
Data can be a tricky beast. Marketers need it in order to fully understand their customers and increase business sales; but agencies often hold onto it in order to ensure their clients will stay with them. Sometimes the arrangement works well. After all, it's a daunting prospect for any new (or even established) business to sift through thousands of gigabytes of data in order to perform analysis on an ever-changing consumer landscape. More often than not, however, the marketer and agency are at cross-purposes when it comes to who owns, and more importantly, who has access to the client's data.
According to Advertising Age, this battle is only going to intensify. A recent article quoted Andrew Swinand, a former media-agency executive who is a partner at an analytics firm, as saying: "What's fascinating is how many clients have given away license to their data without knowing it." Once a marketer signs with an agency, they are often beholden to that agency's technology systems. Retrieving data from these agencies can be arduous at best. At worst, the information can be provided as an unusable data dump. This means that leaving an agency, even one where the relationship clearly is not working, can seem like it's not worth the price.
The fact is that algorithms may not make people swoon, but their importance can't be underestimated. The merger between New York-based Omnicom Group and Paris-based Publicis Groupe, for instance, has struck a chord with both marketers and agencies alike. It's clear that by joining forces, these advertising powerhouses will be able to utilize their data to zero-in on precise segments of the population for which many of their competitors simply won't have the scale to access.
As the Wall Street Journal put it, "Madison Avenue is increasingly a bastion of geeks: computer programmers, data heads and quantitative analysts." Marketers that don't work with a Madison Avenue outfit have to play even smarter. This means partnering with agencies that have complete integrity and data transparency. It also means working with agencies that are invested in building, maintaining and updating their data systems. An agency can't just provide data on inbound calls or web orders without also looking at predictive models, market segmentation, and multiples angles of comparison.
The bottom line is that although many agencies are attempting to hold data hostage (in part by not revealing all the types of data they're gathering in the first place) marketers would do well to stand firm on the battlefield. It's critical to ask the kinds of questions that will lead to a more balanced relationship, where clients own and have access to their data, and the agency has the right to use the data on the clients' behalf. By the same token, in an age where business competition is at its fiercest, agencies would be wise to rethink the old idiom, "All's fair in love and war."
354,000 Reasons to Take Advantage of Direct Response Radio Advertising
We dig TV advertising as much as the next guy. But geez...
The average 30-second TV ad rose 9% to $354,000, reports Response Magazine. That's before media costs. And before knowing if the ad will work - and, if so, how well.
Can you imagine paying that much money for a TV ad...before you even know that it'll work - that it'll grow your business profitably?
Neither can we. Yet it happens all the time. That's the world of "brand advertising." Our hats are off to the brand advertising agencies that somehow are able to sell their clients on spending tons of money to create ads without being accountable for any sort of measurable results. Clearly the best sales pitch is happening in the room when that decision happens. Of course, that's not necessarily true of the ads that get created afterwards.
To put this in context, consider the following. Production costs for a radio ad are rarely more than $1,000. Further, we can test multiple ads (messages) across multiple audiences and yield the optimal message/targeting combination...for less than $30,000. That includes all ad development costs and media dollars.
And we put our money where our mouth is: if, after testing, we haven't created a profitable advertising campaign for our clients, we've lost money alongside them. That's a risk that most (if not all) TV agencies are simply not willing to take.
What this means is that for less than $30k, you've got a nationwide radio advertising campaign that is ready to start delivering a large number of profitable new customers to your door (or website) - in a demonstrably measurable way, week-in and week-out, for years to come. And it'll build your brand in the most powerful and lasting way - by directly driving customer engagement with the brand.
But if you prefer, we can create one heck of an out-of-the-box radio ad and charge you, say, $100,000 for it. We'll come to your offices and pitch you on how awesome it'll be and how much we think your customers will love it. Then we'll all go out and party together and have a great time. And when we air the campaign we won't measure results, so your boss and/or shareholders won't be able to prove that your decision was a poor one!
Or, you could give accountable radio advertising a try. You could have an expert team create the right message and target the right customers for your business. Then you could see just how well radio works for you, and save that $354,000 for a down payment on a corporate jet.
How Smartphones are Boosting Direct Response Radio Results
Smartphones are everywhere, yet none to date have a radio receiver embedded in them. This has led some to assert that radio is a thing of the past. Yet, once again radio is proving remarkably adaptable and resilient.
Terrestrial (traditional) radio has not only endured but thrived for over 100 years, even through the arrival of television, the personal computer and the internet. Today, 92% of the U.S. population over twelve listens to radio every week (Arbitron Radio Today 2012). And with the growing use of smartphones, terrestrial, streaming and satellite radio are poised to become more ubiquitous and therefore an even more powerful customer acquisition tool for direct response radio advertisers.
Advertisers in any medium are challenged to prevail over the distractions consumers face. Smartphones are making it easier for radio advertisers to cut through these distractions. In fact, thanks to smartphone technology, never in the history of direct response radio advertising has it been easier for listeners to respond to your ad. Long gone are the days when a phone number is hastily written down on dirty napkin in the car with the hope it might find it's way into the listener's home.
Now when you persuade the listener to engage, voice recognition like Siri and Dragon Dictation make it more convenient than ever to capture critical information like phone numbers and URLs. If you're running a great promotion and are relying on codes for tracking purposes, accessing the internet via your smartphone makes it quicker and smoother than ever for your customers to participate. When your radio ad does what it can and should do - stimulate, entice and inspire customers to respond - smartphones help advertisers close the attention gap, and more importantly, drive response and close a sale.
It's easy to see how smartphones are helping direct response radio advertisers, but why isn't AM/FM radio a feature of your phone? We recently pointed out in our radio advertising article for Electronic Retailer Magazine, penetration of smartphones in the United States passed 50 percent in 2012 and none of them offered terrestrial radio. This will soon change. Sprint's recent press release disclosed Android and Windows phone devices will come equipped with NextRadio FM tuners.
By the end of 2013, 80% of the world's population will be using a mobile phone. Add to this that in 2012 Neilson Mobile Insights' reported that smartphones account for 50% of all mobile phones in the U.S. By 2016, less than three years away, smartphones will account for close to 70% of all cell phone sales world-wide. Now that traditional radio will join streaming radio options such as Pandora and Spotify on your smartphone, there has never been a better time to take advantage of direct response radio advertising.
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Predictably Irrational: The Hidden Forces that Shape Our Decisions, Dan Ariely
Outliers: The Story of Success, Malcolm Gladwell
Made to Stick, Heath & Heath
The Power of Persuasion, Robert Levine
Influence: Science & Practice, Cialdini
Words That Work, Frank Lutz
My Life in Advertising and Scientific Advertising, Claude C. Hopkins
Or Your Money Back, Alvin Eicoff
Being Direct, Lester Wunderman