Suppose a Metro Detroit small business owner woke up one morning and found a 100-year-old machine in the basement of her store. She soon discovered that every time a dime was put into the machine, one dollar came out. Imagine, now, how profitable that business would become.
Good news: such a contraption exists, and every business owner probably has one in their car, in their store, in their home, even on their phone. It's called Detroit radio.
Over the past few years, Nielsen has conducted more than 20 studies to determine what type of return-on-investment (ROI) a business owner can expect from radio advertising. Although the results varied by industry, the average company generated $100 in sales for every $10 invested. Turning dimes into dollars.
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.
One of the reasons radio advertising delivers such impressive returns is the medium's dominant reach.
Last week, for instance, significantly more consumers tuned-in to Detroit radio than watched local TV, read a newspaper, engages with social media platforms like Facebook and Instagram, or streamed audio from Pandora and Spotify.
According to Nielsen, reach is the most important media consideration for driving sales. It is more important than branding, targeting, recency, or context.
Radio commercials have also proven to be very effective in producing unaided message recall at time of purchase. A consumer in Southeast Michigan can only buy something from a company they can remember. This can have a profound effect on ROI, as well.
Local Ad Recall, a research company that measures the effectiveness of advertising, found that brand recall was five times higher for companies that advertised on radio versus the companies that did not.
Local business owners have learned first hand of the impressive returns-on-investment advertising on Detroit radio delivers.
"Our phones started ringing even before our first commercial on Detroit radio ended," says Dr. Kairi Horsley, DPM. He and his father, Dr. Barton Horsley are co-owners of Horsley Foot and Ankle, a podiatric medical practice in Southfield.
"That was, in 2015," says the younger Dr. Horsley. "Five years later, our commercials still bring us 12 or 13 new patients every week."
Since it first started advertising on Detroit radio, Horsley Foot and Ankle has been running commercials consistently across two stations. The results of the Horsley's continued advertising investment has been profound.
"The majority of the new patients we see every day come because they heard about us on the radio," says Dr. Kairi. "We get more patients that way then we do from referrals."
In all, Dr. Kairi estimates that their radio advertising brings in almost 700 new patients every year.
"Before we started advertising on the radio, most of our patients were local to our practice. But once our commercials began, we now regularly see patients from all over Southeast Michigan."
The return-on-investment that Horsley Foot and Ankle finds with radio advertising is consistent with the results of the 20-plus Nielsen ROI studies.
After seeing the results of those studies, media expert Doug Schoen wrote in Forbes Magazine, "I found this data nothing short of fascinating. It’s quite clear that we should all be paying more attention to radio, its reach and potential to help our businesses. It’s doing the job with expert efficiency.”
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