2. RAEL Personal Relevance Personal Connections How Radio Ads Affect Consumers

3. WHAT’S RAEL Overview RAEL First Study: WirthlinWorldwide Key Implications RAEL Future Studies INSIDE

4. RAEL OVERVIEW

5. RAEL Overview RAEL Mission: To work with advertisers, agencies and Radio broadcasters to further the industry’s understanding of how Radio works and to measure its effectiveness RAEL Goal: To better understand issues concerning Radio and consumers including: –Synergy –ROI –Radio effectiveness for advertisers A Brief Introduction

6. RAEL Overview While future studies will address synergy and ROI, the objective of the Wirthlin study was to better understand how Radio advertising affects consumers in ways that are different from television and newspapers Allows us to further comprehend how to make Radio more effective A Brief Introduction

7. RAEL FIRST STUDY WirthlinWorldwide

8. RAEL First Study Introducing a new and compelling consumer research study conducted by WirthlinWorldwide, funded and designed by the Radio Ad Effectiveness Lab (RAEL) An Introduction

9. Radio “speaks to me” –Radio listening is a one-on-one and emotions driven experience –Radio listeners believe Radio advertising is more relevant to them –Radio listeners turn to Radio to gratify their personal wants and needs Core Learnings RAEL First Study

10. Contrast perceptions of Radio advertising and the media against television and newspapers Phase One: One-on-one interviews Phase Two: Mail or on-line questionnaires –50% Radio/television, 50% Radio/newspaper –600 respondent goal – 662 completed Complete methodology and results can be obtained at http://radioadlab.org/reports.htm Methodology RAEL First Study

11. Radio Ads’ Strengths Relative to Television Ads Consumers see Radio ads as more personally connected to them and more relevant RAEL First Study

12. “If done correctly, Radio ads can really hold my attention – I can feel like someone is actually speaking directly to me.” The Respondents – A Snapshot RAEL First Study Respondent 313

13. Radio Ads’ Strengths Relative to Newspaper Ads Consumers see Radio ads as being more connected to them as individuals RAEL First Study

14. The Respondents – A Snapshot RAEL First Study “They come up with creative ideas to catch your attention…It makes me actually listen to the ad. I end up buying the product.” Respondent 107

15. Radio advertising has a personal and emotional connection to the listener To better understand this connection, it’s essential to comprehend the listener’s perception of each medium The Outcome RAEL First Study

16. Based on consumer perceptions of each medium (in general), Wirthlin plotted “pathways” or related groups of attributes, consequences and values Radio as Compared to Other Media RAEL First Study Consequences Enhanced My Mood Enhanced Performance Enlightened Perspective Heightened Senses Enhanced Social Values Caring Connection to Family Accomplishment Contentment Attributes Relevant Information Portable Broad Audience Easy Access

17. In a broad sense, some pathways occur in more than one medium However, different drivers exist within each pathway The Radio drivers clearly demonstrate a personal, emotional connection The Outcome RAEL First Study

18. Individual Medium “Drivers” for Accomplishment Path A Side-by-Side Comparison Greater understanding of the world around me Personal happiness Feeling of calmness and ease Inspired Hopeful Empowered Try harder to succeed The latest information Ability to control people and events in my life Empowered Helped me understand what’s going on in world The latest information Ability to control people and events in my life Hopeful Helped me understand what’s going on in world The latest information Radio connects with personal emotions as much or more than other media RAEL First Study

19. Individual Medium “Drivers” for Mood Enhancement and Satisfaction Path Personal happiness Feeling of calmness and ease Joy Improved my mood/made me feel happy I had a good time Radio offered a wide variety of programming Feeling of calmness and ease Joy I had a good time It made me relax Television has an excellent picture quality Radio’s path derives more from “personal happiness” than TV A Side-by-Side Comparison RAEL First Study

20. Radio clearly emerged as the medium to satisfy personal wants/needs and, as a result, impacts perception towards advertising Personal Relevance, Personal Connections and Emotions Radio Ads Have Personal Effects Radio Usage: Personal Satisfaction Radio Triggers Personal Emotions Directed to me Advertising wants to reach me Local product and services Personal trust Access to “my” favorites “My” stations Wide variety Local news and information Personal happiness Feeling of calm and ease Inspired Empowered Feeling positive RAEL First Study

21. KEY IMPLICATIONS

22. Key Implications For Brand Planning : Consider brand positioning sub-sets for Radio executions – personally and emotionally gratifying are the triggers Sectionalize creative briefs to cover the distinct audience characteristics and ad receptivity dynamics for Radio What it means for Advertisers

23. Key Implications For Brand Planning: Pre-test the creative idea whenever possible –Assess the relevance of the core creative organizing idea, even with 1-2 impromptu focus groups –Appropriate messaging can be highly effective in Radio due to vertical populations and associated mindsets What it means for Advertisers

24. Key Implications The Media Execution: Planners can include Radio with confidence. These current, real-time insights are relevant to consumers’ lifestyles and perceptions today. Not surprisingly, targeting is key for Radio and consumers will notice (and reward) advertisers who make the effort to speak directly to them. What it means for Advertisers

25. Key Implications The Media Execution: Radio advertising should be reflective of its surroundings –Appropriate formats –Proper daypart placement –Environment –Program Content What it means for Advertisers

26. Key Implications The Media Execution: Go beyond mass age/sex –Think format segmentation and psychographics when planning –Plan against station/format “communities” or clusters –Break down broad targets into lifestyle and generational segments What it means for Advertisers

27. Key Implications The Media Execution: Leverage campaign extensions and/or retail promotions against the consumers’ “values” in their world –Personal values are a key reason they connect with the medium –Develop programs that satisfy relevant needs –Keep ideas in sync with the programming environment What it means for Advertisers

28. Key Implications The Creative Execution: An opportunity exists to make a strong connection at an emotional level –Be direct (speaking to a listener) –Be honest –Provide solutions that use emotional hooks based on Radio’s “Drivers” – personal happiness, empowerment, feelings of calmness and ease What it means for Advertisers

29. Key Implications The Creative Execution: Radio advertising should speak to people on a personal level –Relevant copy –Relevant messaging –Use multiple treatments when necessary (mass appeal products targeting multiple demos and lifestyles) What it means for Advertisers

30. Key Implications What it means for Advertisers The Creative Execution: Go beyond “funny” and “functional” –Provide an integration of function (product) with emotional recognition (consumer) –Rational arguments are less important than building an emotional envelope, within which lies a brand differentiation statement

31. Key Implications Elaborate production may be less important than having the right message – the right conduit into personal relevance and emotions. An example… What it means for advertisers Mount Sinai Mercury Award Finalist

32. Key Implications In Summary: Radio is the most personal medium of the three studied Consumers choose Radio to satisfy very personal wants and needs Radio affects listeners at an individual and emotional level Final Thoughts

33. Key Implications Radio benefits from the personalized connection Radio ads, like the programming that contains them, are seen as “speaking to me” Radio advertisers are associated with “trying harder to reach me personally” Final Thoughts

34. Key Implications If we accept the commonly held belief that a consumer’s emotions are key to advertising effectiveness, when executed correctly… Radio will be at least as effective as other media– if not more so. In the end

35. Key Implications In the end The Emotional Appeal Brand Affinity Purchase Consideration

36. RAEL THE FUTURE

37. PreTesting Company –Conducted by The PreTesting Company –Measures Radio’s power when added to print or TV –Includes in-lab tests with 800 consumers for five products to compare the effects of exposures in TV or newspaper to combined exposures from Radio+TV or Radio+newspaper –Preceded by standard pre-tests of creative –Recruitment for second phase in progress –Results due third quarter 2004 THE FUTURE OF RAEL The Second Study

38. Millward Brown/IRI –Conducted by Millward Brown and IRI –Measures in-market Radio sales effect with and without TV –Is the “Holy Grail” of accountability research –Use of IRI BehaviorScan Markets –Considerable support on the research committee –Key advertisers being solicited for participation –Fieldwork begins third quarter 2004 –Second phase planned for 2005 THE FUTURE OF RAEL The Third Study

39. Contact Information www.radioadlab.org (800) 364-3239 marketing@rab.com (800) 252-RADIO