Nielsen—Radio Linked To Huge Plus-Side ROI.

INSIDERADIO

September 18, 2015

Few advertiser goals are more vital than plus-side return on investment, and radio appears to be a blockbuster conduit, providing a sizable payoff for brands in four retail categories, according to a new sales effect study from Nielsen. Depending on the category, radio exposure led to increased sales, foot traffic and dollars spent per shopper. For mass merchandise retailers included in the study, the medium delivered a staggering 16-1 return on investment. Radio also begat a plus-side ROI for each of the categories, including home improvement stores (10-1) and quick service restaurants (3-1), in addition to a 17-1 return for department stores, a number that was first previewed Sept. 30 at the Radio Show in Atlanta. Hispanic consumers, a segment that over-indexes for radio usage, led all categories measured in total spend and drove increased sales ranging from 9% to 49%. The new study comes as agencies and advertisers increasingly expect ROI validation from their media partners. In each category, the study found radio exposure positively affected bottom line sales and drove new, valuable shoppers. Pierre Bouvard, chief marketing officer of Westwood One and Cumulus, said as much in response. "In the past two years, Nielsen has looked at 22 brands advertising on the radio across multiple categories and the results are consistent—radio resoundingly drives consumer spending," he said. "In fact, across all of the examined categories, radio delivers an average $8 incremental sales for every $1 spent. As marketers look for measurable ROI, Nielsen’s studies demonstrate the true value of radio to not only provide massive reach, but directly impact consumer spending." The Necessity of Radio—Nielsen analytics exec weighs in on the medium’s value at InsideRadio.com.

Breaking Down Nielsen’s Radio Ad-Vantage Study. A new study by Nielsen found that among categories of radio advertisers, department stores have been buying themselves the biggest bang for their buck. Four department store brands that used radio campaigns experienced a 10% increase in sales, a 3% increase in total number of buyers and a 6% increase in dollars spent per customer. All told, radio delivered a whopping return of $17 for every $1 spent. A pair of radio-using home improvement store brands saw a 4% increase in sales, an 8% increase in total number of buyers and a 2% increase in transactions. Radio’s ROI for the home improvement stores was $10 for every $1 spent. Two mass merchandiser retailers that bought radio ads experienced a 1% increase in overall sales, 2% increase in total number of shoppers and 2% lift in dollars spent per transaction. That added up to a $16 return for every $1 spent. Finally, three quick-service restaurant brands that implemented radio campaigns saw a 6% increase in sales, a 6% increase in consumers and a 1% increase in dollars spent per purchaser. The new research is the latest in a series of ROI studies from Nielsen, showing radio produced a plus-side ROI range from 1.38 for soft drinks to 23.21 for retail. The study cross-referenced time-stamped PPM listening data with Media Monitors spot tracking data to determine which listeners were exposed to the ads. Nielsen tapped its credit and debit card expenditure data to track the participants’ department store purchases and calculated the brands’ radio ad spend with SQAD data. Study participants were separated into two groups and weighted to be identical on key characteristics including age, gender, race, education, employment status, household size, children and buying history.

Nielsen Confirms Radio’s Political Clout. As radio works to extract a larger share of what is forecast to be record-setting election season ad spending, new research from Nielsen shows the medium’s political firepower goes well beyond just a stop on the talk show circuit. Radio can deliver voters to the polls, the study concludes, and the best stations to reach specific voter segments vary from market to market and daypart to daypart. In a first-of-its-kind study, Nielsen matched Experian Simmons Political Personas Consumer Segmentation with PPM listening data in Los Angeles and Philadelphia. In L.A., Nielsen found that a single radio station reaches more than one-third of each of three voter segments in both parties while in Philly a single radio station reaches as many as 54% of each voter segment. In early morning L.A. traffic, when L.A.’s mild Republicans are driving to work, news/talk/information formats rank highest. During their drive home, mild Republicans listen to news/talk/information, AC and adult hits to equal degrees. Conservative Democrats in L.A., on the other hand, prefer Spanish contemporary on their morning drives, followed by all-news and Spanish adult hits. During the afternoon drive and on weekends, they evenly prefer AC and Spanish adult hits. The study found that radio can be a key way for candidates to connect with specific voting segments and that different formats deliver specific voter groups in particular markets. “The best choice of format is as unique to the local market as the districts and the propositions that will be voted on,” Nielsen said in the research report. “Radio’s local approach to programming means that local stations attract different voter types in each market, and that these voters migrate to different stations depending on the time of day.”