Advertisers have long believed in the power of radio advertising, but many struggle to draw direct correlations between their investment and campaign performance metrics. The days where advertisers can get by without justifying their investments are dwindling, which is why it’s never been more important for them to have direct insight into whether their efforts are paying off.
The good news is that advertisers can assess whether their radio ad campaigns affect consumer purchase behavior, as illustrated by the results of a recent case study that looked at the return on ad spend (ROAS) of a top five telecommunications (telco) company. For the analysis, Nielsen worked with the Katz Radio Group to examine the telco company’s share of the adult (18+) customer base in two ways: with and without exposure to the radio ad campaign.
To assess return on advertising investment, the study linked Nielsen Portable People Meter (PPM) data for first-quarter 2014 campaign exposures on the specific stations used during the campaign with consumer purchases using credit and debit card transaction data from more than 125 million Americans 18+ who had heard the ads. The results showed that radio delivered $14 dollars in incremental sales for each dollar invested in advertising.
The listeners who were exposed to the radio campaign spent $210 million more on the telco’s products and services over the three-month period than if they had not been exposed to the radio campaign. The telco advertiser spent approximately $15.3 million dollars in radio advertising in the PPM markets during the quarter. When the increase in sales is compared with the radio investment level, the study found the ROAS for this radio campaign to be $14 to $1.
There was also meaningful lift in average spend per month during the campaign period among those exposed to the radio ad campaign. Their outlay was $8 more per month than consumers who were not exposed. The impact of this particular campaign resonated particularly well with Millennials, who represent the largest generation of nationwide radio listeners, according to Nielsen’s recent Audio Today Report. In fact, Millennials exposed to the campaign had double the increase in their monthly spending ($16 verses $8) for the Telco’s products and services.