Despite the rise of digital technology, radio remains one of the most powerful communication and advertising tools worldwide. Currently, there are over 15,450 commercial radio stations in the United States alone — that's more than double the number of stations available back in the '70s. Most radio stations generate revenue through ads. If you own a station, it's crucial to identify the best prospects for radio advertising and reach out to them in a meaningful way.
TL;DR (Too Long; Didn't Read)
Focus on a specific niche when looking for the best prospects for radio advertising. This will allow you to better target your ads and provide greater value to your audience and advertisers alike.
Does Radio Advertising Still Work?
American radio stations generated about $13.3 billion in 2018. WTOP-FM, the most popular radio station in the U.S., earned nearly $70 million that year. KIIS-FM, its main competitor, made approximately $62 million. Furthermore, this communication medium has a weekly reach of around 90%.
These numbers are living proof that radio isn't dead. After all, thousands of brands, celebrities and artists promote themselves on the radio, and it makes perfect sense, considering that the average American listened to an average of one hour and 42 minutes of radio daily in the first quarter of 2019. According to a recent study conducted by the Radio Advertising Bureau and TagStation, most radio commercials increase store traffic by around 22%.
There's no doubt that radio advertising still works. However, it's undergoing a process of digitalization, as most marketing channels do. More and more consumers are listening to the radio online, which opens up a world of opportunities for advertisers. Weekly online radio consumption increased by 48% between 2007 and 2019, with Spotify generating 23% of all ad revenue in 2018. This communication channel is readily available and comes in a familiar format, reaching millions of people daily.
Best Prospects for Radio Advertising
Running a radio station isn't cheap. Even if you have a basic studio, you must still get licensed and pay rent, utilities, employee wages and so on. Advertising is by far the best way to generate revenue. Radio commercials vary in price depending on their reach, consistency and frequency.
The first step to make a profit is to identify the best prospects for radio advertising. As reported by the Radio Advertising Bureau and TagStation, automotive and beauty retailers benefit most from promoting their services on the radio. Companies in these niches get about 32% more store traffic than usual from a single spot. Home improvement stores, on the other hand, get only 7% more visits after their commercials go live.
Start by making a list of potential customers in your area. Reach out to local businesses that might be interested in advertising on the radio, such as beauty salons, private clinics, auto repair shops and fitness centers. Ideally, focus on a specific niche and then contact local companies that fall under that category. Take the time to research your target audience and create an advertising package offering multiple options in terms of pricing, time slots and ad frequency.
Research Your Target Customers
Make sure you have a clear understanding of the advertisers you want to reach. Create a buyer persona based on their revenue, location, number of customers and business goals. Similarly, research the listeners you're targeting. Consider their age, gender, income, music preferences and other factors. Use this information to draft customized proposals for advertisers.
A beauty salon, for example, would look for a radio station whose audience is interested in health and wellness. A marketing agency, on the other hand, will advertise on a radio station whose audience consists of business professionals. That's why it's important to define your niche and learn about your target market.
Companies that advertise on the radio pay for air time. However, just like with TV or digital advertising, they need to make sure their message reaches the right customers at the right time. If your radio station is targeting teens, it doesn't make sense to sell advertising to law firms, for instance. Instead, focus on local or national businesses that sell sports equipment, concert tickets, clothing and other products that appeal to a young audience.
Radio Advertising Sales Strategies
There are a couple of things you need to consider before making a radio advertising sales presentation. First, think about how you will schedule your radio ads. Decide how many times the average ad will go live on a weekly basis so that it provides value to advertisers without overwhelming your audience.
According to Leighton Broadcasting, the ideal ad frequency is about 3.4 impressions per person a week. For best results, advertise in short bursts during specific times of the day, such as in the morning or during night shows. To maximize your profits, give your clients the opportunity to choose whether they want to advertise several times a day or for longer periods of time. Let them know how many consumers will hear their message and come up with hard facts, such as the impact of radio advertising in that particular industry.
Tell advertisers how you can maximize their reach. For example, you can help them raise brand awareness by using humor or pathos to engage their prospects. Another option is to play their ads during celebrity interviews. Don't hesitate to charge more for the very best slots.
Leverage Joint Advertising
Some companies, especially startups and small businesses, have a limited budget and may hesitate to invest in radio ads. One way to convert them to customers is to advertise joint campaigns. Basically, you can allow them to go in on a campaign together and split the costs. For example, a car dealership can join forces with an auto repair shop in an advertising campaign to increase sales and brand awareness.
Merging ad sales is a common practice in the business community. With this strategy, two noncompeting companies leverage their strengths to promote individual products and reduce advertising costs. Joint advertising, or co-marketing, can help businesses reach new markets and grow their audience while sharing resources and expertise. It's a win-win for both parties.
Provide Additional Services
In addition to these radio advertising sales strategies, consider offering additional services to your prospects. For instance, you could mention them on your website or blog and social media pages as part of your advertising package. Another option is to put their brand names and logos (along with your own logo) on promotional merchandise.
If your radio station sends out newsletters to its listeners, you can mention the companies with which you work. Consider writing reviews of their products and services on your site or blog. For example, you can create a blog series that introduces each advertiser to your fans. You could even ask advertisers to offer special discounts to those who buy from them after seeing their ad on your website or hearing it on the radio.
Get creative with your radio advertising package. Offer several plans at different rates and charge more for extras. Reward returning customers and those who sign up for a yearly plan with discounts and freebies. Remember that finding the best prospects for radio advertising is just the first step. You also need to turn them into customers and keep them engaged.
- Statista: Number of Commercial Radio Stations in the United States From 1952 to 2018
- Statista: Radio Station Advertising Revenues in the United States From 2006 to 2018, by Source (in Billion U.S. Dollars)
- Statista: Leading Radio Stations in the United States in 2018, by Revenue (in Million U.S. Dollars)
- Statista: Weekly Radio Reach in the United States in 2019, by Age and Gender
- Statista: Average Daily Time Spent Listening to the Radio per Adult in the United States From 1st Quarter 2015 to 1st Quarter 2019 (in Minutes)
- eMarketer: Radio Ads Still Drive Sales
- Forbes: No, Radio Isn't Dead -- In Fact, It's Doing Better Than Ever
- Leighton Broadcasting: Radio Is Still the Top Medium for Advertising Effectiviness
- Statista: Share of Monthly Online Radio Listeners in the United States From 2007 to 2019
- Statista: Market Share of Selected Companies in Internet Radio Advertising Revenue in the United States in February 2018
- SpoutSocial: Co-Marketing
- Deloitte: Radio: Revenue, Reach, and Resilience