Suppose a Boston small business owner woke up one morning and found a 100-year-old machine in the basement of their store. She soon discovered that every time a dime was put into the machine, one dollar came out. Imagine, now, how profitable that business would become.
Good news: such a contraption exists, and every business owner probably has one in their cars, in their stores, in their homes, even on their phones. It's called the radio.
Over the past few years, Nielsen has conducted more than 20 studies to determine what type of return-on-investment (ROI) a business owner can expect from radio advertising. Although the results varied by industry, the average company generated $100 in sales for every $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 consumers tuned-in to Boston radio than watched local TV, read a newspaper, engages with social media platforms like Facebook and Instagram, or streamed audio from 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. A New England 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 learned first hand of the impressive returns-on-investment advertising on Boston radio delivers.
"Advertising on Boston radio really helped to push our company into profitability for the first time. It was the tipping point for us," says Chad Langley, CEO of Teststripz.
"If we hadn't started advertising on the radio when we did," adds Chad's brother Chris the company's CTO, "we would probably be out of business right now.
Teststripz was founded in 2011 by Chad. The company operates an online marketplace where people who suffer from diabetes can purchase low-cost supplies from others who have an oversupply. This includes test strips and meters.
"Test strips are durable medical products, not drugs" explains, Chad. "It is perfectly legal for someone who has an oversupply to sell them to others as long as the boxes are unopened and weren't paid for by Medicare or Medicaid."
"We rely on advertising," says Chris, "to find these sellers. This is the only we can secure enough inventory to fulfill the constant demand from people looking to buy low cost supplies."
The company's first noticeable growth spurt came, however, when the Langley's began investing in Google pay-per-click advertising (PPC).
"We started seeing results pretty quickly," says Chris "But it was costing us more than we were making, so we were operating at a loss."
In 2017, with the mounting cost of acquiring inventory, the Langley's were not sure their company would ever turn a profit.
"When we started advertising on the radio, our cost of acquiring supplies dropped by 66%, which allowed us to be profitable for the first time," says Chad.
Since Teststripz began advertising on Boston radio, they have not stopped. The company now utilizes four local stations. This includes DJ endorsements which, Chad says, "really adds credibility to our brand."
As a result of its commitment to radio advertising, the company sees increases in its flow of supplies every month. Sometimes, by as much as 400%.
The return-on-investment that Teststripz finds with radio advertising is consistent with the results of the 20-plus Nielsen ROI studies.
After seeing the results of those 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.”
More Advice For New England Small Business Owners
- Advertising Options For Boston Small Business Owners
- Meet 5 Successful Small Business Owners Who Advertise On Boston Radio
- Advertising in Boston Creates Growth For Local Small Business
- Advertise In Boston: Reaching Valentine's Day Shoppers
- Why Tax Professionals In New England Need To Advertise Now
- Advertise In Boston: The Value of Marketing To College Graduates
