Radio Advertising Really Works

Questions about the viability of terrestrial radio abound. People ask me all the time what impact satellite or Internet radio has on our business. I have to respond by saying, not much. First of all, AM and FM radio listenership is at record levels. There are more people listening to AM and FM radio than at any other time in history. There are nine times more people listening to terrestrial radio than listen to satellite radio. Internet radio listening is a mere fraction of terrestrial radio. There are over 15,000 full-power commercial radio stations on the air in the United States and more being built all the time.

As the summer retail season kicked off this year, Home Depot bought nearly a quarter of a million radio commercials in just two weeks. For those of you who sell AM radio advertising, a large number of those radio commercials run on radio networks that air heavily on AM radio stations.

On May 5, Home Depot released their latest financial report. Same-store sales out performed their own forecast of 4% to 5.5%. Revenues and profits were also up better than forecast.

Home Depot out performed others in the category by a wide margin, the category was up 4.3% but Home Depot was up 6%.

But before you think it’s all about low price, the average Home Depot shopper’s ticket grew 3.9% and the sale per square foot of store space grew 4.6%. Sale of big-ticket items, priced $900 or more, rose 15.8%.

And don’t go thinking their growth is all about the growth in the housing market.

“While inevitably helpful, it would be unfair to say that Home Depot’s performance is solely down to underlying economic factors,” said Neil Saunders, Managing Director of GlobalData Retail. “In our view, the company has worked hard to stimulate growth and defend its market share.”

Terrestrial radio’s real problem is not satellite or Internet radio, the real problem is an inconsistent and often conflicting sales message. It is rare to hear the same sales presentation from two different sales people. If a business entertains radio proposals from three different sales reps, they are likely to hear three different, and possibly conflicting presentations.

Terrestrial radio needs a universal sales presentation. Look at Home Depot, for example. First, acknowledge to your prospect that most local businesses don’t have the amount of money to spend on advertising as Home Depot. That is not the point. It is the way Home Depot deploys their advertising that we can learn from. Home Depot follows the “Four Keys to Advertising Success.”

  1. Home Depot is consistent in their advertising. They advertise consistently year-round.
  2. Home Depot buys as much reach as their budget will allow.
  3. Home Depot buys as much frequency as their budget will allow.
  4. Home Depot focuses on creating an emotionally engaging creative message.

Our sales pitch should always be: It’s not about how much you spend, it’s about how long you spend what you can afford to spend. Spend what you can in the same way as the big guys do. Home Depot advertises consistently week in and week out. They buy a balance of both reach and frequency with their budget. They also spend a lot of money on creating emotionally engaging creative messages.

Home Depot understands that branding their business consistently places their brand at the top of the consumer’s ladder of importance, so when it comes to home improvement projects, Home Depot is the first name that comes to the mind of the consumer.

Remember, advertising by itself doesn’t cause anyone to do anything. All advertising does is inform consumers about their options when they have a triggering event in their life. Radio adds something special to advertising. Radio adds emotion. People listen to their favorite radio station because they love the music the station plays.

Radio listeners trust the messenger, consequently, they trust the message.

That should be the radio sales presentation.

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