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June 05, 2006

Snapple Bets On Radio Advertising

Thanks to Adpulp for pointing out the New York Times article about Snapple's deal to be the sole advertiser on WFNX FM in Boston for 40 days beginning in late May.

The cost will be "more than $2 Million", according to the Times.

Just some quick math, since we're all about accountable advertising (that's direct response for you)...

Using some round, rough numbers, if Snapple's gross margins are about 30% and if that equates to about $.60 per bottle, then to break even before overhead they'll have to sell a minimum of 3.3 million incremental bottles of Snapple as a result of this 40-day campaign. That comes out to an average of 83,333 additional bottles per day. Of course, since Snapple is a "brand" company, they could justify any number short of that figure as "brand equity" created and stick it on the balance sheet as an asset ("brand equity"). Either way, we'd be very interested in knowing whether they come even close, especially when considering any post-promotion "hangover" that may occur.

We're big advocates of testing, and testing and tracking the results of big ideas is required for success. We applaud Snapple's bold move with WFNX FM in Boston and look forward to hearing whether the move paid off. Surely the Times will write a follow up.

Posted by Brett Astor at 06:32 PM | Permalink