The Sales Impact of Radio
A Look at Radio Performance for Department Stores & Telecom
Nielsen 2015 ROAS study
ROAS: Return-On-Ad-Spend
For too long we’ve been dealing with anecdotal evidence of performance not empirical
data
We now have empirical data
We must be the evangelists!
Who conducted this research?Nielsen did
Largest global marketing research firm worldwideAlso measures TV, Online, VOD
So has no horse in this race---completely unbiased
Nielsen would never put their name on any research that couldn’t withstand the scrutiny of research experts worldwide
Background: DEMO A18+
RESEARCH OBJECTIVE
To measure the sales impact of radio advertising
Department Stores• 4 Brands• Test Period: Q3 2014• Pre Period: Same Time Prior Year
Telecom• 1 Brand• Test Period: Q1 2014• Pre Period: 3 months prior
Capable of measuring radio, television and Internet broadcasts, retail video and audio broadcasts.
Nielsen’s PPM Audio Technology: To record Listening
PPM encoding solution identifies broadcast and online audio content
1.The meter, worn all day, detects the watermark embedded in the audio broadcasts
2. Data collected by the meter are sent to Nielsen Audio3.
Meter automatically detects inaudible codes embedded in audio portion of broadcast program or commercial.
Proprietary codes identify media to which participant is exposed.
This listening data is then Matched to Media Monitors commercial occurrence data
(Was the listener tuned in when the commercial ran) Nielsen Audio Reporting
Nielsen Audio Panelist Exposures – Radio Commercials
Matched to Radio Commercial Occurrence Data*
This information is then fused with credit and debit card purchases
SINGLE SOURCE (Individual) DATABASE
PURCHASE BEHAVIOR: Credit & Debit Card Expenditures of 125 MM unique cardholders
• 80%+ US credit card transactions
• 30% of US debit card transactions
• 12B transactions accounting for $1.2 trillion spent annually
It boils down to this….
Comparing the purchasing habits of those exposed to the commercial and those not exposed to the commercial
They match Radio PPM listening with Media Monitors commercial occurrence data to determine if the participants were exposed to the advertiser’s commercial and if they were exposed they determine how purchasing behavior (via their credit and debit card records) differed
from those not exposed to the commercial
3 PILLARS THAT DRIVE ROAS- Return-On-Ad-Spend
BUYERS SPENDING MORE PER TRIP
BUYERS SHOPPING MORE OFTEN
MORE BUYERS
EXPOSURE TO RADIO CAMPAIGNS DROVE A +10% INCREASE IN SALES OVERALL
* Ad spend source is SQAD
RADIO BROUGHT IN MORE SHOPPERS AND THEY SPENT MORE EACH TIME THEY SHOPPED
6% increase in dollars spent per buyer
3% increase in total number of buyers
$356,966,946Incremental spend for customers exposed
to the Q3-2014 radio campaigns
$20,999,788*Total Q3 2014 radio ad spend
$17 ROASIMPACT OF RADIO EXPOSURE RADIO AD INVESTMENT
Q3 2014 - Four brands - Compared to same time prior year
DEPARTMENT STORES $17 OF INCREMENTAL SALES FOR EVERY $1 SPENT ON RADIO
Long term will be higher- residual effects
EXPOSURE TO RADIO CAMPAIGNS DROVE A 10% INCREASE IN SALES OVERALL
* Ad spend source is SQAD
RADIO BROUGHT IN MORE SHOPPERS AND THEY SPENT MORE EACH TIME THEY SHOPPED
6% increase in dollars spent per buyer
3% increase in total number of buyers
$356,966,946Incremental spend for customers exposed
to the Q3-2014 radio campaigns
$20,999,788*Total Q3 2014 radio ad spend
$17 ROASIMPACT OF RADIO EXPOSURE RADIO AD INVESTMENT
Q3 2014 - Four brands - Compared to same time prior year
DEPARTMENT STORES $17 OF INCREMENTAL SALES FOR EVERY $1 SPENT ON RADIO
Develop into loyal customers
EXPOSURE TO RADIO CAMPAIGNS DROVE A 10% INCREASE IN SALES OVERALL
* Ad spend source is SQAD
RADIO BROUGHT IN MORE SHOPPERS AND THEY SPENT MORE EACH TIME THEY SHOPPED
6% increase in dollars spent per buyer
3% increase in total number of buyers
$356,966,946Incremental spend for customers exposed
to the Q3-2014 radio campaigns
$20,999,788*Total Q3 2014 radio ad spend
$17 ROASIMPACT OF RADIO EXPOSURE RADIO AD INVESTMENT
Q3 2014 - Four brands - Compared to same time prior year
DEPARTMENT STORES $17 OF INCREMENTAL SALES FOR EVERY $1 SPENT ON RADIO
Radio advertising impacted behavior
EXPOSURE TO RADIO CAMPAIGNS DROVE A 10% INCREASE IN SALES OVERALL
* Ad spend source is SQAD
RADIO BROUGHT IN MORE SHOPPERS AND THEY SPENT MORE EACH TIME THEY SHOPPED
6% increase in dollars spent per buyer
3% increase in total number of buyers
$356,966,946Incremental spend for customers exposed
to the Q3-2014 radio campaigns
$20,999,788*Total Q3 2014 radio ad spend
$17 ROASIMPACT OF RADIO EXPOSURE RADIO AD INVESTMENT
Q3 2014 - Four brands - Compared to same time prior year
DEPARTMENT STORES $17 OF INCREMENTAL SALES FOR EVERY $1 SPENT ON RADIO
Long term will be higher- residual effects
EXPOSURE TO RADIO CAMPAIGNS DROVE A 10% INCREASE IN SALES OVERALL
* Ad spend source is SQAD
RADIO BROUGHT IN MORE SHOPPERS AND THEY SPENT MORE EACH TIME THEY SHOPPED
6% increase in dollars spent per buyer
3% increase in total number of buyers
$356,966,946Incremental spend for customers exposed
to the Q3-2014 radio campaigns
$20,999,788*Total Q3 2014 radio ad spend
$17 ROASIMPACT OF RADIO EXPOSURE RADIO AD INVESTMENT
Q3 2014 - Four brands - Compared to same time prior year
DEPARTMENT STORES $17 OF INCREMENTAL SALES FOR EVERY $1 SPENT ON RADIO
Develop into loyal customers Radio advertising
impacted behavior
Long term will be higher- residual effects
43%
HISPANICS 18+
10% 10%
PERSONS 18+ AFRICAN-AMERICANS 18+
DEPARTMENT STORES% Change TOTAL SPEND
DEPARTMENT STORESHISPANIC AND AFRICAN-AMERICAN INSIGHTS
Previous Nielsen study Q1 2014 also showed that Hispanic ROAS was larger than general market
Total Mkt Avg Hispanic Avg
5.87.1
+22%
2014 study: Hispanic consumers show higher response to campaign exposure
Hispanic radio dollar share point gains by advertiser
Source: Nielsen Catalina Solutions Studies of 3 radio ad campaigns, March 26, 2014 indexed to general market share point gains from study
Total Mkt Avg Black Mkt Avg
5.8
6.9+19%
Black radio average dollar share point gain by advertiser
Source: Nielsen Catalina Solutions Studies of 3 radio ad campaigns, March 26, 2014 indexed to general market share point gains from study
2014 Study: Black consumers show higher response to campaign exposure
* Ad spend source was Client Provided Budget
$210MIncremental spend on Telco Brand by customers exposed to radio campaign
$15.3M*Spend on radio
$14 ROASIMPACT OF RADIO EXPOSURE RADIO AD INVESTMENT
SOURCE: Nielsen Buyer Insights P18+ Telco Brand campaign (1/1/14-3/31/14)
TELECOM $14 OF INCREMENTAL SALES FOR EVERY $1 SPENT ON RADIO
The Telco company radio campaign reached almost 88 million people (P18+) in PPM markets
Telco company buyers exposed to radio campaign spent $8 more per month than consumers who were not exposed
TELECOMMILLENNIAL AUDIENCE INSIGHTS
During the campaign period, Millennials exposed to the campaign had double the increase in monthly spending for the Telco company’s products and services ($16 increase in monthly spending vs. $8 increase for A18+ exposed audience).
Not only do Millenials listen to Radio they respond to its commercials
RADIO DRIVES ROAS FOR DEPARTMENT STORES AND MANY OTHER CATEGORIES
RADIO PAYBACK PER $1 AD INVESTMENT
Q3 2014
Q1 2014
RADIO DRIVES ROAS FOR DEPARTMENT STORES AND MANY OTHER CATEGORIES
RADIO PAYBACK PER $1 AD INVESTMENT
Q2 +Q3 2013
Retail A +B average out to $17 as well
RADIO DRIVES ROAS FOR DEPARTMENT STORES AND MANY OTHER CATEGORIES
RADIO PAYBACK PER $1 AD INVESTMENT
A $3 or $4 ROAS is still strong and noteworthy
Retail and Department stores ROAS will always be higher for two reasons:
- Higher ticket items than chips, candy and soda
- Market basket potential: i.e. I go to purchase the product advertised in the department store but end up buying other products in various departments
Now let’s put these Radio ROAS results into
some kind of perspective
Below came from a recent Bloomberg article
Ron Amram works for Heineken“Late that year he (Amram) and a half-dozen or so colleagues gathered in a New York conference room for a presentation on the performance
of the online ads. They were stunned. Digital’s return on investment was around 2 to 1, a
$2 increase in revenue for every $1 of ad spending, compared with of at least 6 to 1 for TV.”
Makes Radio’s performance in both ROAS studies look pretty good!
Advertising Age
What Medium Scores Highest ROI? It May Be Radio
Nielsen Catalina Study Shows Big Returns for Small Outlays
Published on March 25, 2014
Brands averaged a sales lift of more than $6 for every $1 spent on radio ads – an ROAS double that of even the best results from many recent studies of digital or TV
media, including one from France and Coca-Cola that Facebook recently touted.
A little noted fact from the 2014 Nielsen studyFound that radio delivered a powerful sales lift when heard within a few days of purchase.
A consumer exposed to an ad within a day of purchasing increased the brand share by +9%, while messages delivered 28 days prior to purchase increased share by +3.4%.
Speaks to the importance of continuing brand presence- Being there!
Of delivering a message within the window of opportunity— one of Radio’s key strengths
Recency
Great Book written by Erwin Ephron: titled Media Planning
Ephron was named on of the 5 most influential people in media in the past 25 years
There are other benefits of Advertising beyond immediate ROAS• Neutralizing effect: No business competes in a vacuum.
• Maintaining a current customer base and revenues against competitive advertising “conquesting” designed to take what you’ve got
• Maintain share of mind: Share of mind= share of market • Share of mind is accomplished by maintaining a marketing share of voice
• Long term Brand building—establish a competitive “firewall”• Long term positive impact of “legacy” advertising- advertising just keeps giving• Impacts other non ROAS metrics necessary for short and long term success
• Awareness- only thing that grows in the dark is a mushroom. Business/revenue doesn’t• Intent• Consideration- can’t buy from if your not in their consideration set• Affinity• Advocacy- word-of-mouth- best type of advertising
Affinity / Likeability
Awareness
Average % Lift: Radio-targeted consumers vs. Control groups
Studies conducted while at Katz: Advertisers see lifts in 5 key branding metrics when Radio is used in marketing campaigns
Advocacy
Consideration
Purchase Intent
+ 17%
+ 23%
+ 19%
+ 38%
+ 37%
Source: Radio Advertising Effectiveness Program, Ipsos OTX, 2010-13; conducted for Katz Marketing Solutions.
Creative can account for as much as 75% of a campaign’s impactCreative can make 100 GRPs perform like 200 GRPs or 50 GRPs
Likeable Emotive Factual Informative Motivating DifferentiatingAverage of Top
Quintile 56% 45% 72% 69% 42% 43%
Average of Bottom Quintile
26% 15% 25% 20% 13% 14%
Buy Believable Soft Sell Share Talking 2 Me EntertainingAverage of top
ads70% 85% 50% 58% 69% 75%
Average of Bottom Ads
27% 52% 19% 25% 41% 35%
To be read: the top ranked commercials on average were ranked as likeable by 56% of the respondents vs the bottom ranked averaging 26%.
Need some world class creative ideas?
Good artists borrow, great ones stealGo to:
www.radiomercuryawards.com and search archives - you can search by category, advertiser, year, etc.
Summary$17:1 ROAS Department stores
$17: ROAS Retailers- Key local account$14:1 Telecom
Beats TVOther studies on the way
Additional benefit of Advertising: Neutralizing conquesting, SOV, SOM, branding
Dramatically impact 5 key brand health metrics- awareness, intent, consideration
Practice discussing and presenting this info. Any questions, just call