10-Year Marketing Study: Radio Ads Deliver 42% Profit Growth

As marketers seek to grow brands, increase sales, and boost profitability, a new study from marketing effectiveness expert Peter Field provides strong evidence that traditional radio advertising remains one of the most effective tools to achieve all three goals.

The study, The Long and the Short of It – 10 Years On: Radio’s Enduring Role in Effectiveness, analyzes more than 1,200 marketing case studies from the Institute of Practitioners in Advertising, revealing the advantages of including AM/FM in a media strategy.

Field’s research shows that brands using radio advertising experience significantly stronger market share, pricing power, brand recall, and return on investment than those that do not. His findings indicate that AM/FM increases mental availability by 13 percent, making brands more recognizable and memorable when consumers are making purchasing decisions. Market share among brands using over-the-air radio is 28 percent higher than those that do not, with companies leveraging radio seeing an average market share of 32 percent compared to just 25 percent for brands without it.

Field’s study also highlights that pricing power is one of the biggest drivers of profitability. Companies that can maintain or raise prices without losing customers enjoy greater profit margins and long-term stability. His data shows that advertisers using AM/FM enjoy a 17 percent increase in pricing power, which directly contributes to higher profits. Businesses that include radio in their media plans see a 42 percent increase in profit growth compared to those that do not.

In addition to stronger market positioning, radio advertising generates a significant return on investment. Nielsen’s analysis of dozens of AM/FM radio sales effect studies finds that, on average, radio advertising delivers a $10.59 return for every dollar spent. This places AM/FM radio among the highest ROI media channels, making it a cost-effective and high-impact investment for brands looking to maximize their advertising dollars.

A real-world example of radio advertising’s effectiveness can be seen in Steve’s Pest Control, a Missouri-based company that grew from a single van to a fleet of 90 by consistently using AM/FM radio advertising as its primary marketing tool. Over the course of 30 years, Steve Hotsenpiller and his team devoted 8.5 percent of their revenue to AM/FM radio ads, gradually expanding their reach across multiple stations. Their investment paid off, with 34 percent unaided brand awareness, 40 percent ad recall, and purchase intent two and a half times higher than competing brands.

Additional research from Nielsen Media Mix Modeling ranks radio as a top-tier medium for ROI. A separate study by Ebiquity and Gain Theory finds that audio ranks second in short-term return on investment and third in long-term ROI. Brands that use AM/FM radio experience a 23 percent greater return on marketing spend compared to those that do not.

More on Field’s results can be found via the Cumulus Media/Westwood One Audio Active Group.