Retail spending in the Detroit area is expected to reach $63 billion this year, a 13.5% increase versus 2020. These estimates are based on a revised forecast from the National Retail Federation (NRF).
Since 1920, when WWJ-AM signed on as the first station in Detroit, local business owners have depended on radio advertising to help market their goods and services to Southeast Michigan consumers. But has the Coronavirus pandemic altered the medium's ability to deliver customers to ring up sales for local retailers?
Two critical marketing metrics indicate that advertising on Detroit radio remains the best way for a small business to advertise.
The first measurement is reach. This is the number of different consumers who are exposed to an advertising campaign.
The second measure is return-on-investment (ROI). This is the amount of sales a business can expect for every one dollar invested in advertising.
Based on these metrics, here is how advertising on Detroit radio measures up to other options available to local small business owners.
According to a Neilsen study of successful advertising campaigns, after the message itself, the number of different consumers reach has the greatest effect on sales.
Despite the pandemic, Detroit radio maintained its reach advantage among other advertising options.
Each week, according to Nielsen, 2.8 million adult consumers tune-in to a Detroit radio station. This is significantly more people than are reached by all other local advertising options, including TV, cable, streaming video, streaming audio, social media, and newspapers.
Between April 30 and May 27 of last year, the darkest days of the pandemic, Nielsen analyzed the sales results of a retailer who conducted an advertising campaign during that period using both radio and TV.*
According to Nielsen, the retailer experienced a 6.2% increase in sales growth during the campaign period. The majority of the increase came from households where consumers were exposed to the advertising campaign.
When Nielsen looked at how each advertising medium contributed to sales growth, the consumers who were exposed only to the retailer's radio commercials were three times more likely to make a purchase than those exposed only to television advertising.
According to Nielsen, people exposed to only the retailer's radio commercials represented only 20% of all advertising impressions. However, these same consumers were responsible for 42% of the sales increases.
The bottom line of this study for any Detroit small business owner who is struggling with where to place their limited marketing budgets. Radio produces the strongest increase in sales for every dollar invested. In this Nielsen study, the retailer earned a $28,000 increase in sales for every $1000 spent.
These findings confirm 21 previous studies by Nielsen, which demonstrate that, on average, radio advertising returns $10,000 in advertising for every $1000 invested.
AdAge, a trade magazine for advertising professionals, calls these types of returns "eye-popping." The magazine goes on to say radio's ROI is superior to commercials on TV, online, and social media.
Radio advertising has helped Detroit business small business owners survive wars, depressions, recessions, and natural disasters. Based on the key marketing metrics of reach and ROI, the pandemic had not diminished radio's ability to deliver sales.
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