RAB: Radio ads offer nearly 8 times the return on investment
Brands using radio for advertising get almost eight times the return on investment, according to the first-ever analysis of cross-agency data, conducted by the Radio Advertising Bureau (RAB).
On average radio advertisers get their money back 7.7 times over, with automotive and retailer brands showing an even higher performance. This makes radio the medium with the second-highest ROI - behind TV, but outperforming press, outdoor and online.
Currently radio carries 6% of all advertising budgets, but if budgets were reallocated to give radio a 20% share of total, the total campaign ROI would rise by over 8%. For the top 100 radio advertisers, this is equivalent to getting an extra £1.4 billion return on advertising investment.
The data, unveiled at an industry event on Wednesday morning, also revealed that campaigns which maximise weekly reach up to and beyond 40% deliver significantly stronger radio ROI, suggesting that coverage is the new 'touchstone' for optimising radio effectiveness.
"With data sourced from all of the world's major agency groups the RAB analysis provides the most detailed and robust perspective on radio ROI in the world," said said Simon Redican, managing director of the RAB.
"We wouldn't be surprised if the game-changing findings prompt finance directors to ask their marketing teams 'Are we allocating at least 20% of our media budget to radio?'"
The results are based on a 15 month analysis conducted by Holms & Cook, taking confidential ROI data supplied by nine econometrics agencies covering over 2,000 individual media campaigns.