Why Radio Makes a TV Ad Buy Better

By Bob McCurdy -

January 3, 2017

(By Bob McCurdy) Pierre Chandon, a L’Oréal Professor of Marketing, Innovation and Creativity at INSEAD, a respected global business school, recently wrote an article titled, “The First Bite is the Sweetest.” In it he summarized the results from several cuisine-focused studies he’d undertaken in the U.S. and France, concluding:

— The first bite of a particular food provides the greatest enjoyment, but that larger “portions” tend to devalue the consumption experience.

— The initial enjoyment wears off and by the time someone reaches the end of a large portion, the final bite is “pretty bland.”

It seems as if the professor stumbled upon the existence of a mealtime point of diminishing returns (PODR), which we’ve long known exists in marketing. Our challenge, though, has been to identify the point at which the diminishing returns actually kick in for one medium and when to add another.
Nielsen’s channel-planning tool, Commspoint, enables us to shed some light on this phenomenon by individual media channel.

The following chart highlights the PODR for TV against the A25-54 car owner. The vertical axis represents “reach” while the horizontal axis reflects the number of GRPs aired over four weeks. This type of analysis can be done for any number of weeks.

Note that TV reach continues to increase as GRPs increase but at a drastically decreased rate. Three hundred GRPs or 75 GRPs/week, generate a 65 reach, while 400 GRPs or 100 GRPs/week, generate a 70 reach. Four hundred GRPs costs 33% more than 300 GRPs, yet only increases reach 7%. This certainly qualifies as a PODR. One could even argue that the PODR was reached at the 250 GRP level or about 65 GRPs/week.


We see from the next chart that radio’s reach builds quickly, likely comprised of light TV viewers, and when added to a TV-only campaign, will increase the overall reach and effectiveness of the schedule:

The complementary nature of the two media can be seen in the following chart. Both media build reach at approximately the same rate with largely different audiences – the heavy TV viewer and the heavy radio listener. Note at the 100 GRP level the reach differential between the two media is indistinguishable.

A couple of takeaways from the charts above:
— Radio actually makes TV more efficient and effective by increasing TV’s ROAS (return on ad spend). ROAS increases as each medium’s budget allocation is optimized. Overspending in any medium results in wasted impressions and a lower return on ad spend.
— TV and radio deployed in concert increase the overall reach of the campaign. In the example above, allocating 25% of the TV budget (buying 300 GRPs instead of 400 GRPs) to radio, according to Commspoint, increased total campaign reach by 18% while considerably enhancing overall awareness, consideration, and trial metrics.
Digital and other traditional media are not immune to this PODR phenomenon. Note how quickly the reach of the channels below flatline at a level far below radio’s.

Going overboard in any medium leads to “bland” results. No matter how much more effective any medium might be at the outset of a campaign, there does come a point when the next ad dollar would be better spent in a different medium, as past a certain juncture every subsequent impression begins to produce a diminishing marginal response. Commspoint enables us to identify not only each medium’s PODR but the optimum balance of complementary media necessary to maximize media spend.