(By Matt Nystrom) This is an open letter to my colleagues in the radio industry. If you’ve spent any time working in advertising, you’ve probably heard some variation of the century-old quote, “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.” Despite its dubious origin or veracity, advertisers and media sellers have long pursued attribution models that aim to eliminate advertising waste. To that end, it has become easy to gorge on a glut of up-to-the-minute marketing insights.
Digital marketing metrics, in particular, have created a Pavlovian response in advertisers conditioned to see immediate insight and results. Appetites for on-demand information have traditional media sellers feeling compelled to measure the efficacy of their products in ways that undermine their core strengths.
Case in point, for us working in the radio industry, it has been hard to miss recent chatter about digital attribution programs designed to track the minute-by-minute impact of radio advertising. Pundits and executives across the industry have been quick to herald the arrival of such programs as a way to prove radio’s worth and demonstrate real-time ROI.
In simple terms, these attribution programs simultaneously hook into a radio station’s automation system and a client’s web metrics. Every time a commercial runs, the station monitors that client’s website traffic for a predetermined period (usually eight minutes). Any activity observed during that window is attributed to the radio commercial.
The fundamental flaw in this attribution method is that it’s impossible to know precisely what portion of a client’s web traffic was indeed a direct result of a particular radio advertisement. Furthermore, many clients run their radio campaigns across multiple stations in a market. If two or more stations run the same commercial at roughly the same time, which station gets the credit?
Telling our clients that radio’s ROI can be measured in real-time misrepresents how radio works and how it’s consumed. Radio listeners are often on the go and tuning in on a diverse set of devices. When you consider that the average commute in the United States is nearly 27 minutes, do we really believe that listeners pull over on the way to or from work to visit a website in response to radio ads? If they don’t, should we assume those commercials aren’t working?
What about industries with long sales cycles? Is there no value in reaching listeners who aren’t intenders today, but will be weeks or months from now?
A radio market manager told me of a client who refuses to run commercials outside of business hours out of fear that the phone would ring and no one would be around to answer. Although it’s encouraging that the client is certain radio commercials work, it illustrates the way that ad buyers are being conditioned to expect an instantaneous response from all advertisements.
Gauging radio’s ROI using minute-by-minute measurements is a dangerous cocktail that will harm our industry. If this trend becomes standard practice, we’ll face the unintended consequence of turning every campaign into tight sales-activation messages that ultimately sabotage radio’s most effective application: brand building.
Across the pond in the United Kingdom, Les Binet and Peter Field have turned out incredible research for IPA that has demonstrated the cumulative effect of long-term branding campaigns. In a 2013 report titled “The Long and the Short of It: Balancing Short and Long-Term Marketing Strategies,” the pair establish what they call the 60:40 rule, which states that the optimal marketing-message mix is 60% brand building and 40% sales-activation.
Binet and Field found through extensive research that the sales effects of brand building are cumulative and increase slowly. Short-term sales-activation messages bring a sharp lift in sales, but the effects decay quickly.An update published in 2017 declared:
“Activation effects are relatively easy to measure, because they tend to be big, immediate and direct. In the short term (six months or less) they tend to produce the biggest sales responses. … Because the effects of brand building only become apparent over the long term, short-termism is dangerous. It can lead to excessive activation (which is inefficient), and under-investment in the brand (which can lead to long-term decline).”
Even if marketers are patient or diligent enough to adhere to a 60:40 marketing mix, it’s not a given that their employer will be in it for the long haul. When you consider that the median tenure for CMOs at the top consumer brands in the U.S. is only 31 months, it’s rare for marketing executives to fully implement and reap the rewards of long-term strategies.
Quick hits from sales-activation are important to harvest the fruits of your brand building, but it’s not a sustainable strategy. Mark Ritson sums up the perils of not following the 60:40 rule this way:
“Marketers are increasingly short-term in their focus. They spend money on immediate activation rather than longer-term brand building. They opt for bottom-of-the-funnel tactics because in a one-year time period that will always pay better. … Too much time spent picking the low-hanging fruit means less time watering the tree. Eventually, the tree stops growing.”
The radio industry cannot allow the increase of new competition to turn us into bad or lazy marketers. The uneducated demands of radio clients should not compel us to misconstrue the long-term benefits of radio’s core strengths. Radio works over the life of a campaign to build emotional connections that last far longer than eight minutes, eight days, or eight months.
Building a healthy brand is much like trying to get your body in shape. Meaningful improvements in your physical health are the culmination of a number of factors such as eating well, regular exercise, and getting enough sleep. The business impact of just one radio commercial is roughly the same as the health effects of having a salad for lunch. Yes, salad is a good choice, but the results of healthy living are observed only over time.
It’s the job of radio sales executives to educate advertisers about how to use our medium effectively and demonstrate how to measure a return on marketing investment. Well-crafted branding campaigns running at a high frequency establish a top-of-mind awareness that contributes to an increase in demand, market share, brand recognition, and customer loyalty, as well as a decrease in price sensitivity.
When a consumer visits a company’s website, the direct referral might have been a search result, display ad, or online promotion. Good marketers know that long-term traditional-media exposure can have a huge influence on the behavior resulting in that user’s visit.
The hard truth is that the radio industry has not done a good job telling our story and establishing our worth. We’ve allowed outsiders to brand us as old-fashioned, ineffective, and dying. Worse, we’ve stood by while digital marketing companies have taken an oversized share of credit for their part in sales-activation. It’s time to reclaim our reputation as the number one reach medium, the best way to connect with audiences on an emotional level, and a powerful tool for unaided recall.
Stop measuring your effectiveness by the wrong standard. Don’t feel compelled to fit radio into the mold of the latest marketing trend. You’re doing a disservice to your clients if you’re not showing them the value of building a brand. Quit allowing your clients to gorge themselves on the sugar high of short-term activation and show them the value of balancing their marketing diet with messages that will have a sustainable, long-term impact on the health of their business.
Matt Nystrom is the VP of Digital Media for Saga Communications and can be reached at [email protected]