Electronic Retailer - October 2011 - 31

call or go to a location to get something for free. According to Jeff Small, CEO of Strategic Media Inc., an agency of direct response radio experts, one of the main differences today from radio five years ago is the rating system used by Arbitron, a media and marketing research firm. The old system used a diary to measure across all markets. Today it uses PPM – Personal People Meter – to measure listening habits. The markets that are measured by PPM are able to offer ratings monthly to agencies, as opposed to the old system, which was quarterly. “This means working with much more accurate, up-to-date numbers, allowing us to better optimize media budgets and thereby boost campaign profitability even further,” says Small.

Also new is the use of digital radio. The streaming opportunities were there five years ago, but radio is now making a bigger push to try and monetize offerings through the web. Although consumers are starting to show interest in streaming radio, they still haven’t resulted in purchases at this stage.

The Good, the Bad and the Not So Bad
Most agencies would be surprised at the breadth of product categories that are successful on radio. Products that are usually considered visual – perfect for television – have been wildly successful in radio. Part of the reason for this success is the courage and openmindedness that has driven marketers to test new opportunities.

“What we’re seeing is that new creative approaches can be developed, quite different from what’s always been done before, and are able to entice the customers to respond,” says Small. As an example, he cites the home fitness category, where many campaigns have moved into radio. But radio still has its challenges. According to Bill Sullivan, managing director of direct response at William Sullivan Advertising, a division of JL Media, a full-service direct response agency, the biggest challenge for direct response marketing in radio has not changed: If the product has too low of a price point and there is no continuity program, it will not survive. While most people working in the DRTV industry know this challenge well from working in television, the same mentality now needs to be applied to radio. Yet another old challenge that remains is the difficulty in working with radio stations and networks to assemble the best performing schedules for clients. This challenge includes obtaining the best rates. “Working with a large network of stations that gives alternatives within the different genres is a key piece of being a successful media buyer,” says Small. Finally, when direct marketers take into account the economy, the outlook is not so bad for radio campaigns. When the economy took a turn for the worse a few years back, many thought radio would die out with it. On the contrary, radio has gotten more popular. Shows using on-air personalities and top hosts are sold out through the first quarter of next year. There have been no problems moving inventory. In fact, if the campaign is not the right fit, stations are turning advertisers away. The lackluster economy has opened up a greater acceptance of direct response among advertisers, as stations will now do anything to sell inventory. “Cost per thousands for a radio buy is extremely low for the better DR radio buyers and for the ones that can survive,” says Sullivan.

Radio Versus TV and the Internet
Although the buying and selling of airtime on radio may work in a similar 31

October 2011 | electronicRETAILER

Electronic Retailer - October 2011

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