While soliciting broadcast clients at Katz years ago, we used a simple diagram to highlight the importance of having a larger sales staff than whichever Interep company we happened to be targeting. Our motto was, “God is on the side of the larger army.” The point we stressed was that even if our salespeople weren’t better than Interep’s, all else being equal in terms of work ethic, training, pre-selling efforts, and closing ratio, our larger sales staff would produce better results.
The concept was based upon simple math. In any “battle,” the army with the most “soldiers” usually comes out on top. Look no further than the Little Big Horn and the Alamo to confirm this point. Sly Stallone’s Rambo might have whipped the entire Soviet army but he’s always been an exception. It’s a statistical thing called the “Law of Large Numbers,” and applies to advertising, particularly as it pertains to campaign reach, which is something radio delivers exceedingly well.
Let’s now apply this “law.” Which campaign will deliver better results — all else being equal in terms of creative, timing, consumer’s targeted, etc. — a schedule with more or less reach? One thing is for sure, you can only influence a consumer to buy a product or take advantage of an offer if they know about it. And the most effective way to “know about it” is by being exposed to its advertising.
Word-of-mouth is nice but it is not enough. And consumers only take action when a commercial message is relevant, which even in 2016, is largely a function of serendipity — a chance collision of a commercial and an interested customer. This continues to be true more than digital pundits care to admit, and this too speaks to the importance of reach.
Let’s say a schedule delivers a 70 reach against A25-54’s and gets 4% of all exposed to take the desired action. If there are 10,000 people in this market’s A25-54 demo, this schedule would reach 7,000 25-54 adults and produce 280 sales (7,000 x .04). How much more effective would campaigns with lower reach delivery need to be to generate the same number of sales? A lot! And it would be largely an impossibility given similar creative and offerings.
If the reach dropped from 70 to 60, reaching 6,000 instead of 7,000 consumers, then 4.7%, not 4%, of all exposed to the commercial would need to take the desired action to produce the same number of sales as the 70 reach campaign. An 18% response rate increase. Highly unlikely.
If the reach dropped from 70 to 50, reaching 5,000 instead of 7,000 consumers, then 5.6%, not 4%, of all exposed to the commercials would need to take the desired action to produce the same number of sales as the 70 reach campaign. A 40% response rate increase. Extremely unlikely. If the reach dropped from 70 to 40, reaching 4,000 instead of 7,000 consumers, then 7.0%, not 4%, of all exposed to the commercials would need to take the desired action to produce the same number of sales as the 70 reach campaign. A 75% response rate increase. No way. In summary:
- Consumers can’t respond to an offer if they are not exposed to it.
- The commercial must be relevant for any action to occur.
- The greater number of consumers reached, the greater the odds of reaching interested consumers.
- Fewer commercials on more stations will result in each station’s P1 (heavy) listeners being reached, a better distribution of impressions, more reach, and a greater chance of reaching someone who’s interested in buying what’s being advertised.
- The dramatically increased response rates required by the lower-reach campaigns to generate the same results of the larger reach campaigns are impractical to ever expect. The “marketing gods” are indeed on the side of the campaigns with the greater reach.