Radio has long been touted as the medium with the #1 reach. But now, advertisers have even more reason to love radio. In a historic new Nielsen study in which actual media exposure was connected to actual consumer spend to generate actual sales effect and ROI (return on investment), Nielsen found that a retailer’s AM/FM radio sales lift was triple that of TV.
Nielsen has analyzed the sales lift of AM/FM radio campaigns in dozens of studies, but this is only the fourth time the sales lift of both AM/FM radio and TV were examined in the same study.
In the study, Nielsen study analyzed a campaign for an undisclosed retailer who ran both radio and television ads during a month-long period in April and May 2018. The campaign allocated $11.9 million to its radio budget and $9 million to its TV budget. Nielsen was able to measure exposure to every single radio and TV spot down to a person level among 80,000 respondents. Each respondent’s commercial exposure was then matched to actual spend using credit and debit card spending from the home address.
Nielsen divided respondents into three categories:
- Those reached both by the TV and AM/FM radio campaign (57%)
- Those who saw only the TV ads (23%)
- Those who only heard the AM/FM spot (20%)
Here are some key findings:
The majority of those only reached by the AM/FM campaign were light TV viewers
Two-thirds of those who only heard the radio spots were light TV viewers, while just 10% were heavy TV watchers. As Westwood One Chief Insights Officer Pierre Bouvard wrote in a blog post, “A wise media planner once said, ‘You cannot solve your light TV viewer problem with more TV.’ One of AM/FM radio’s superpowers is the ability to reach light TV viewers. Light TV viewers are rarely, if ever, exposed to TV ads.”
AM/FM radio sales lift is triple that of TV
- Consumers only exposed to the TV ads generated a +4.6% sales increase
- Those exposed to both the TV ads and the AM/FM radio ads had a +4.8% sales lift
- The segment only exposed to the AM/FM radio ads had an outsized +13.4% increase in sales
Those only exposed to the AM/FM radio ads represented 20% of campaign reach yet generated 42% of the total sales lift
The consumers who only heard the AM/FM radio ads and did not see the TV ads had a massive impact on sales. The data showed that 42% of the entire incremental sales lift came from the 20% of consumers who were only exposed to the radio ads. “One point of AM/FM radio-only reach generated two points of incremental sales,” Bouvard said.
AM/FM radio has double the return on advertising spend as TV
Perhaps the greatest takeaway is that for every dollar spent on AM/FM radio advertising, there were $28.82 of incremental sales generated. This is twice the return on ad spend of TV, which generated $13.51 in incremental sales for every dollar spent on TV ads.
The historic study was the first-ever TV and radio cross-media sales effect study for the retail category, and its findings are astonishingly clear.
Bob Leonard, Director of Client Growth at Strategic Media, Inc., said, “We at SMI have long known about radio’s tremendous power to generate lift. The Nielsen study further validates the results our clients have experienced to scale their campaigns using radio advertising.”
To learn how to get a commercial on the radio and get the best ROI for your campaign, contact SMI today.