The weakening of the advertising market has affected metro radio, lowering its projected revenue growth from 6.2% last year to a projected 2% in the current half.
Commercial Radio Australia believes the solution to the drop could be in convincing advertisers to move some of their business from TV to radio.
According to a new study by Millward Brown in partnership with media planning agency, MindShare Australia, shifting 20% of a television advertising budget to radio can increase brand awareness by more than 20% and lift sales by up to 15 per cent.
The research, ‘Radio’s Advantage – Advertising Effectiveness Study’ has been released by Commercial Radio Australia, and shows that radio, used in combination with television, produces better results than using television advertising alone.
The test market study was conducted in Perth and Brisbane last year using two brands – a lesser-known personal hygiene product and a well-known breakfast cereal . Its findings support similar research conducted in the USA and UK in recent years which showed radio advertising has a strong multiplier effect when used in combination with television.
The key findings include:
* moving 20% of your television budget to commercial radio has been proven to increase brand awareness by 22%.
* even among well-known brands, moving 20% of a television budget to reach your audience through commercial radio has been proven to increase brand awareness by 6%.
* even among well-known brands, moving 20% of a TV budget to commercial radio has been proven to increase sales by up to 15%.
The study involved test (80% television, 20% radio) and control (100% television) markets using two brands in the Fast Moving Consumer Goods category (FMCG) – traditionally among the largest spending categories in all advertising.
Commercial Radio Australia CEO Joan Warner says the study highlights the multiplier effect of combining radio with television to create a powerful media combination and shows how effective radio advertising is for clients in combination with television in terms of awareness and sales.
“Today’s advertising climate is highly competitive and very cluttered making it imperative for advertisers to cut through and make an immediate impact on audiences.
“Advertisers must explore media combinations that generate the most for their dollar and this research shows that combining radio with television is a very effective advertising strategy – from both a cost and impact perspective.”
Mindshare Australia CEO Chris Walton says the research highlights how effectively radio and television work together and is a must consider document for everyone responsible for booking media space and planning advertising campaigns.
“These findings show that combining radio and television helps to balance a brand’s media presence across the day alongside a television campaign and provides ample opportunity for a message to reach its audience.”
The results of the research have been released on the same day as a new ad in the radio industry’s multi-million dollar advertising campaign was aired, featuring Nestle and its range of food products.
During the past financial year, the FMCG categories of food, toiletries and cosmetics collectively spent $636 million on advertising, of which only about 2.5% went to radio.*
Warner says by illustrating how Nestle effectively uses radio combined with the results of the research may help build on the spend of this important category, which would greatly benefit from using radio as part of an advertising mix.
Ralph van Dijk, creator of the radio brand campaign from Eardrum International believes “tv will often provide the initial splash, but a radio campaign running concurrently is a way of making the message personal and relevant to the individual. That’s why the two work so well together.”
Warner says Commercial Radio Australia will continue the effectiveness research looking at other combinations with radio, including online advertising.
*Source: Nielsen Media Research, AdEx Report, 2004/2005, Top Advertisers Report.