Every week, according to Nielsen, significantly more consumers are reached by local radio than by Detroit TV.
For Southeast Michigan small business owners whose marketing budgets have been ravaged by the pandemic, though, the question is which of these media can provide the best return for their advertising investments. An ROI study conducted by Nielsen and commissioned by Cumulus Media | Westwood One provides a conclusive answer.
Using their Portable People Meter panel of 80,000 consumers, Nielsen measured the purchase behavior of consumers who were exposed to the advertiser's commercials on both radio and television. To learn more about the methodology, click here.
The result of the study indicates that the money invested in radio advertising had a much stronger return than the money spent on TV.
Here are the key findings of the ROI study:
According to Nielsen, during the campaign period, the retailer experienced a 6.2% increase in sales growth. 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 3-times more likely to make a purchase than those exposed only to television advertising.
Overall, according to Nielsen, people who were 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.This is the bottom-line of this study for any Metro 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. The chart below shows the range of returns from each study.
AdAge, a trade magazine for advertising professionals, calls these types of return "eye-popping". The magazine goes on to say radio's ROI is superior to commercials on TV, online, and social media.
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