Last week, Radio Ink reported on a recent UK study from Thinkbox underscoring the robust return on investment that radio and other audio platforms offer advertisers. Now Cumulus Media Chief Insights Officer Pierre Bouvard is expanding on those findings.
In this week’s Cumulus Media/Westwood One Audio Active Group blog, Bouvard discusses the 24%-18%-58% Rule for radio ROI. “Profit Ability 2: The New Business Case for Advertising” found that 24% of advertising’s profit returns are immediate, occurring within the same week it airs.
18% of profit impact happens between weeks two and thirteen. Yet, it’s the long-term effects that dominate, with 58% of advertising’s profit impact spreading out from fourteen weeks up to two years, indicating that the influence of advertising extends far beyond the immediate horizon.
This extended impact is attributed to the fact that only a small fraction of the consumer base is actively looking to make purchases within the next three months. Consequently, advertising serves not only to convert the immediate demand but also to build future demand among the vast majority who may not be immediate buyers.
The study, which emphasizes the importance of audio in the media mix, also reveals that every dollar spent on audio advertising yields $3.12 in profit within the short term (one to thirteen weeks) and an impressive $6.29 over two years, showcasing the effectiveness of audio in generating returns. These findings position audio as a powerhouse in the media landscape, with its ROI outperforming most other media, including digital platforms, in both the short and long term.
Radio stations, in particular, can glean from this study that their audio advertising can punch above its weight, making it a strategic choice for advertisers looking to maximize profits. The balanced profit payoff of audio, accruing equally in the short and long term, further cements its place as a versatile and effective medium.
