Suppose you found a 100-year-old machine in your attic. You, then, quickly learned that every time you deposited a dime in the machine, one dollar popped out. How many dimes would you drop in that machine?
Good news for Central Savannah River Area small business owners: such a machine exists and you probably have one in your car, at work, at home, even on your phone. It's called local radio.
Over the past few years, Nielsen has conducted over 20 studies to determine what type of return-on-investment (ROI) a business can expect from radio advertising. Although the results varied by industry, the average company generated $100 in sales for ever $10 invested. Turning dimes into dollars.
The chart below shows the range of returns from each study.
AdAge, a trade magazine for advertising professionals, calls these types of return "eye-popping". The magazine goes on to say radio's ROI is superior to commercials on TV, online, and social media.
One of the reasons radio advertising delivers such impressive returns is the medium's dominant reach.
Last week, for instance, significantly more CSRA consumers tuned-in to Augusta radio than watched local TV; read a newspaper; or who logged-on to Pandora and Spotify.
According to Nielsen, reach is the most important media consideration for driving sales. It is more important than branding, targeting, recency, or context.
Radio commercials have also proven to be very effective in producing unaided message recall at time of purchase. An Augusta area consumer can only buy something from a company they can remember. This can have a profound effect on ROI, as well.
Local Ad Recall, a research company that measures the effectiveness of advertising, found that brand recall was five times higher for companies that advertised on radio versus the companies that did not.
Local business owners have always known that they can expect impressive returns-on-investment when advertising on Augusta radio.
"Radio advertising, truly, put our store on the map," says Suzanne Lilly Honeymichael. She and her late husband Ray Lilly started Hardwood Floors & More in Evans, Georgia during the late 1980s.
"For the first years we were in business," she says, "We worked out of our home." In 2007, the Lilly's expanded into the 8000 square foot store on Washington Road, where it has been ever since.
"I was hesitant to start advertising back then," says Ms. Lilly Honeymichael. "I just didn't realize what a strong return-on-investment advertising could bring for us. So, we started slowly."
"The first advertising campaign was on a single Augusta radio station," she remembers. "Pretty quickly, people were coming in telling us they heard about us on the radio."
"Twelve months later, we added six more stations. It has worked so well that we have been advertising on the radio every week since then."
"I credit my growth with a combination of true-grit, follow-up, consistency, referrals, and radio advertising," says Mr. Wingard. "These factors have made me the 37th fastest growing State Farm agents in the country among new agencies."
After about 30 days of being open for business, Mr. Wingard began investing in advertising on two Augusta radio stations. "Almost right away, customers began telling me they heard me on the radio," he says. He now invests in commercials on seven stations.
"Advertising is not cheap," says Mr. Wingard. "But, if you want to grow, you need to it."
"I can tell you, though, advertising on Augusta radio stations is definitely worth the money. I know people are hearing my commercials. It has definitely helped me accomplish more than I could have expected after being in business for just eight months."
Mr. Wingard says, "I recommend that every small business owner in the CSRA put their money in radio advertising. I know I always will."
After seeing the results of Nielsen's ROI studies, media expert Doug Schoen wrote in Forbes Magazine, "I found this data nothing short of fascinating. It’s quite clear that we should all be paying more attention to radio, its reach and potential to help our businesses. It’s doing the job with expert efficiency.”