Television, digital, and social media tend to dominate many major marketing budgets, but as marketers seek to optimize their strategies and determine which channels deliver the best return on investment, radio is again shown to be an underappreciated superpower.
Nielsen’s Dave Hohman addressed some of the issues advertisers have with audio, including radio, due to perceived challenges in measuring its impact in Marketing Mix Models. However, Hohman reports Nielsen’s analysis of over 2,800 campaigns shows that audio can be accurately measured when sufficient impressions are generated, with radio providing huge dividends.
“In our analysis, when the relative weight of impressions is large enough to be measured, radio consistently ranks as a top-tier medium for ROI. Streaming audio also performs well, albeit behind broadcast radio,” he writes.
This comes after a survey by Advertiser Perceptions in August, involving 303 media agencies and advertisers, revealed discrepancies between perceived and actual audience shares for Spotify, Pandora, and AM/FM. Respondents estimated Spotify’s share at 25%, far higher than its actual 4%, and Pandora’s at 18%, compared to the actual 5%. Meanwhile, radio was significantly underestimated at 27%, while its real audience share was 69%. These findings suggest a bias among advertisers favoring digital platforms over established mediums like radio.
Nielsen suggests several best practices for ensuring that audio channels such as radio, streaming audio, and podcasts are accurately represented in media analyses.
One of the key recommendations is to allocate an adequate budget to audio channels to ensure they generate enough impressions to be measurable. Nielsen also advises using As-Run GRPs rather than planned GRPs, as actual media delivery often differs from what was initially planned, and this distinction is critical for accurate performance measurement. Another important factor is analyzing media delivery at the Designated Market Area level, as radio’s effectiveness can vary by market.
Additionally, evaluating media delivery on a weekly basis can reveal timing-related nuances, such as seasonality or promotional spikes, that affect performance. According to Hohman, marketers who follow these best practices and include radio in their media strategies can improve the overall effectiveness of their campaigns.
