Chapter 9 Using Radio Kleppner’s Advertising Procedure, 18e Lane * King * Reichart

Learning Objectives Describe radio’s strengths as an advertising medium. Understand the limitations and challenges faced by radio. Discuss how radio commercial time is bought and sold. Identify different roles of AM and FM radio. Explain the rating systems used in radio. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

The Pros of Radio Primary medium for targeting narrow audience segments Mobile medium going with listeners into the marketplace Medium with immediacy and relatively low production costs Personal relationship with audience Supplemental medium to build reach and frequency Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

The Cons of Radio Reliance on audio with no video limits impact Numerous buys required to overcome small audiences Limited audience research available Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Exhibit 9.1 Average Daily Share of Time Spent with Each Medium Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

ClearChannel Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Radio and New Technology HD radio offers terrestrial radio stations the ability to deliver additional programming on the same amount of bandwidth with higher-quality sound. Satellite radio is available by subscription and limits commercial interruption. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Exhibit 9.2 Listeners and Online Radio Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Advantages of Radio as an Advertising Medium (1) Radio targets. Radio reaches a majority of the population several hours/day. Radio advertising influences consumers closest to the time of purchase. Radio reaches light users of other media. Radio works well with other media. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Advantages of Radio as an Advertising Medium (2) Much of radio listening takes place out-of-home. Radio delivers consistent listening patterns. Radio delivers messages at a low CPM. Radio provides advertisers both immediacy and flexibility. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Exhibit 9.4 Radio Reaches Customers Everywhere Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Limitations of Radio Audience fragmentation Clutter Lack of a visual element Increased use of MP3 players Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Top Radio Formats Country News/news-talk Religion Variety Religious contemporary Adult contemporary Adult alternative Spanish Hot adult Talk News stations Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Technical Aspects of Radio Signal Frequency Amplitude Amplitude modulation (AM) Frequency modulation (FM) Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Exhibit 9.7 Top U.S. Radio Advertisers Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Radio Networks Benefit from Satellite Technology Stations are guaranteed quality programming based on latest audience research. Radio networks bring celebrities that local stations could not afford. Small stations can obtain national advertising dollars. Cost efficiencies of shared programming with hundreds of affiliates keep personnel and programming costs low. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Spot Radio Spot radio means buying radio time on local stations on a market-by-market basis by national advertisers. Exhibit 9.8 Top U.S. Advertisers in Local Radio Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

AM versus FM FM dominates overall listening audience. AM stations reach older audience. Talk radio has “saved” AM; HD radio may help further. Radio is largely devoted to music; especially country. The quality of the audience is as important as the size (hence, focus on niche markets like jazz). Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Radio Dayparts Daypart Time Morning Drive 6:00 AM to 10:00 AM Midday 10:00 AM to 3:00 PM Afternoon Drive 3:00 PM to 7:00 PM Evening 7:00 PM to 12:00 AM Overnight 12:00 AM to 6:00 AM Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Arbitron Provides Ratings Services Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Issues in Buying Radio Time Inventory is perishable. Coordination with other media is a must. Most radio advertisings sold in packages of spots tailored for each advertiser. Fixed rate cards rarely exist. Negotiations determine pricing. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Questions to Pose When Buying Radio What are the product characteristics and benefits? Can these be relayed through radio? Who is the target market and can they be reached with radio? Who is the competition? How are they using radio and other media? What is our basic advertising and marketing strategy? Is it consistent with radio? Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Steps in Buying Radio Delineate the target market Select particular stations based on audience and cost efficiency Schedule spots Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Differences between TV and Radio Ratings Radio advertisers are interested in broad formats rather than programs. Radio ratings measure audience accumulation over a relatively long period of time or several dayparts. Audiences for individual stations are smaller than for television. Higher levels of frequency are necessary. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Metro Survey Area An MSA always includes a city or cities whose population is specified as that of the central city together with the county in which it is located. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Radio Audiences Average quarter-hour persons Average quarter-hour ratings Average quarter-hour share Cume persons Cume rating Gross impressions Gross rating points Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

For Discussion What is the major disadvantage of radio for most advertisers? What are the primary advantages of radio to advertisers? Who are the listeners of AM radio? What do they listen to? Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall