Radio’s return on investment (ROI) is 49% higher than that of television, according to a new US study by Millward Brown and Information Resources Inc (IRI), which claims that radio moves products and increases sales, even when national television is present.
Explaining the research, Gary Fries, president and chief executive officer of the Radio Advertising Bureau (RAB) said: “This study addresses the core issue of advertising, return on investment. Radio’s ROI advantage substantiates our previous theories that radio can and does deliver significant ROI for advertisers.”
The research examined four pairs of radio and television campaigns in a range of product categories over a six month period and found that the sales lift from incremental radio in the study averaged 4.1%.
Incremental radio was shown to deliver more than half the short term sales effect of national network television buys.
The report concludes that, in this test, incremental radio delivered 49% better ROI than the corresponding national television campaigns, using the best available comparative cost estimates.
The US radio industry had a slow April, with national radio advertising expenditure falling by 2% and local radio adspend being flat compared to the same period in 2004.
According to estimates by the Radio Advertising Bureau, April was the worst month in terms of national radio advert demand so far this year, reflecting the sluggishness being reported in the US national advertising economy by other markets (see US Radio Industry Slow In April).
Recent figures released by competitive ad tracker, TNS Media Intelligence, revealed that local radio adspend was up by only 2.2% in the first three months of 2005, while network radio was down by 3.2%. National spot radio was reported to be roughly even with the overall growth of the advertising economy (see Travel Websites Attract 23% More European Women In February 2005).
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