Radio Advertising Costs: How Much Should I Spend?
“How much should I spend on radio advertising?” “How do I know I’m getting the best radio advertising rates?” “Which radio stations should I advertise on?” “What are the good and bad prices of radio advertising?” “How many commercials should I broadcast on a radio station?”
Honestly, there is a lot of confusion about radio advertising. I can’t blame him for asking these questions. Why is radio advertising so mysterious? The answer is: radio advertising is not mysterious. It just helps to know how it works.
Effective radio advertising is based on two main components: the message (the radio ad itself) and the media (on which the radio ad is broadcast).
The message
Let’s first look at the radio commercial itself. Before you even think about which radio stations to broadcast, or how much to spend on radio advertising fees, you need to think about what you are going to say in your radio ad. For this article, I am assuming that all call centers, fulfillment, websites, etc. You, the advertiser, have set the lead generation and sales closing processes in motion. Creating a radio commercial that helps drive traffic is extremely important to the advertising process.
The advertising industry is full of hosts, radio personalities, DJ’s and others who claim to create radio commercials. Be careful here. When entering the field of radio commercial production, look for a radio advertising agency that has experience and a track record of successful ad campaigns. Anyone can create a radio ad, but not everyone can create a radio ad that drives traffic. Some radio stations offer free radio commercials if you advertise on their station. Most of these free commercials are never based on strategy and are just one of several dozen commercials that an overworked radio production person must create in a five to fifteen minute time frame. Remember, you generally get what you pay for.
The most effective radio commercials are based on a solid and proven strategy. The copy is written using time-tested formulas that maximize potential response. Talent is carefully selected to best connect with the end user and the production is based on clear, quality and easily absorbed audio.
So… how much does the radio commercial production process cost? Most of the best performing radio commercials are usually in the $500 to $1000 price range. There are always exceptions to the rule (lots of revisions to the copy or audio, additional voice talent, celebrity endorsements, etc.). etc.), but this figure typically covers the development of a strong strategy, copy from experienced copywriters, performance from high-caliber voice talent, and the highest quality production services.
The media
For many with questions about radio advertising fees and radio station prices, this is where the mystery begins. I’ll try to simplify the mystery of buying radio media as much as we can in this little space.
A good radio ad buy focuses on a few different things:
* Find the best radio stations in a market that matches the demographics (age, gender, income level, etc.) and psychographics (interests, beliefs, hobbies, personality traits, etc.) of your customer.
* Find the time slots that best reach your target customer. mornings? Noon? afternoon?
* Select the top radio stations that most efficiently reach the highest potential customers, the correct number of times (defined as frequency), for the least amount of money
Usually, when researching radio advertising costs, many potential radio advertisers have a pretty good idea of the first two points. However, when it comes to finding the best station (or stations) at the best price, the radio advertising process becomes a bit more challenging.
Here’s how to basically determine how much to spend on radio advertising costs. Within the market you want to advertise in, find the radio stations that have the best potential to reach your target customer. This is based on the formats of the radio stations. Urban hip-hop stations will target a different demographic than a news/talk or soft rock station. After you’ve selected a group of radio stations, contact those stations to let them know you’re thinking of advertising on their radio station. Request specific data from radio stations called “rankers”. This is ratings data that most radio stations can provide based on specific requirements requested. From this point, you can get a good idea of which stations work best for your target demographic.
Once you have narrowed down the radio stations to just a few that effectively reach our target customer, request a proposal based on certain criteria: time slots, frequency targets, etc. From these proposals, see who reaches your target audience most efficiently, using tools like Cost Per Point (ratio between spot rate and rating percentage), Cost Per Thousand (ratio between spot rate and totals). audience category), etc. If a radio station is not competitive, ask it to resubmit a more competitive proposal. Ask for the added value. Yes… it takes quite a while… and yes, it’s hard to tell if all the station’s radio advertising fees are too high. You really have to know the market and the going rates. (This is where having an experienced agency is extremely beneficial!) An agency can compare bids against historical figures to determine if radio station prices are in line with market averages…then negotiate and help execute the purchase.
Great… but how much does this cost? It depends on the size of the market you want to advertise in as determined by Arbitron (the radio rating services). Radio advertising rates can be as high as $800 for 60 spaces in a major market like New York City, or as low as $3 for 60 spaces in Kerrville, TX. How will you know what to spend?
Here’s a valuable system we’ve used from our history of working with radio advertising rates. The system is built on a strong brand schedule that can run one spot per day on the morning run, one per day at noon, and one per day on the afternoon run, Monday through Friday, and two slots on Saturday. and Sunday. There are nineteen ads a week at label prices. This type of program is good at achieving the desired frequency level (meaning that the average listener of a station will hear the radio commercial a certain number of times). Under these broad assumptions, you can use the following chart as a rough guide in budgeting for your radio ad campaign.*
*Please note that these are gross rates and do not include production costs or agency discounts. These are market averages for the standard radio show listed above, actual costs may vary. It does not take into account value added, ROS schedules, bonus points, etc. Different combinations of time slots in different seasons can cost much less.
* Markets 1 -5 (for example: New York City, Los Angeles, Chicago, etc.)
Expect to pay $4,000-$8,000 per week/per station for a top performing station.
* Markets 6 – 20 (ex: Dallas/Ft.Worth, Houston, Phoenix, San Diego, etc.)
Expect to pay $2,000-$5,000 per week/per station for a top performing station.
* Markets 21 – 50 (ex: Denver, Cleveland, Kansas City, etc.)
Expect to pay $1000-$3000 per week/per station for a top performing station.
* Markets 51-150 (ex: Akron, Syracuse, Baton Rouge, etc.)
Expect to pay $800-$2,000 per week/per station for a top performing station.
* Over 150 markets (eg Myrtle Beach SC, Green Bay, Topeka, etc.)
Expect to pay anywhere from $500-$1500 per week/per station for a top performing station.
You may be saying, “Wow! That can be expensive.” In some cases it is! These are standard radio advertising schedules and they come in all shapes and sizes. Sometimes the hours are smaller depending on advertising goals and objectives. However, it is recommended that you can commit to the range of minimums.
Leftovers?
Note that nothing about carryover radio advertising has been mentioned here at all. Remnant advertising is the practice of buying unused inventory at deep discounts. The remaining advertising success exists more in theory than in practice. However, this is not to say that advertisers aren’t having success with carryover advertising. If and when carryover advertising falls into your lap, it is highly recommended that you investigate it. However, basing your entire radio ad campaign on carryover advertising can be a shot in the foot. With the exception of a few times a year, most top-performing radio stations don’t have that much unsold inventory. Often the larger advertisers have contracts that guarantee so many low-cost/no-cost ads that need to run. The reality is that if the big advertisers (with the big dollar calendar) need their spaces to run, or if another advertiser pays just a penny more than you paid for the remaining spaces, slam! You just got taken off the air that day. You can pay for twenty places and only get two of that air. The stations will make up for it, but what if you had that advertising to drive sales? Or better yet, in the age of established radio groups, your remaining advertising could be placed on the third to last ranked station in the market. The result is NO RESULT. I am a firm believer that when it comes to radio advertising, YOU REALLY GET WHAT YOU PAY FOR.
Now that radio advertising fees have been explained, you may be wondering, how long should I advertise? The type of radio advertising helps define the duration of a campaign. Advertising an event? We recommend shorter and more compact schedules to build anticipation before the event or launch. Marking a product? Often long-term schedules with a little breathing room work best. Maybe even stretches could work (two weeks, two weeks off, or some other length of time). Most of the time, the two things that will determine how long a radio ad campaign will last will be the advertiser’s goals (traffic figures) and external factors such as sales cycles. Oh yeah, and usually the budget affects the duration of the campaign. It is not desired, but that is the reality.
The total cost
You may be thinking, “So if I want to run an ad on the three major radio stations in Houston, I should expect to pay $1,000 for a commercial, plus $3,000 per week per station…that’s $10,000 worth of a week’s worth of advertising!” That’s true, and it may be just what it takes to reach several thousand potential target customers. The real question is: “How much money can you make with a few thousand potential target customers?” Is it more than $10,000 per week? $40,000 a month? These are questions to ask yourself, because in the advertising world, that’s pretty good traffic.
It works even better when you let a professional ad agency cut that cost even further. Let the agency provide you with great radio advertising hours by providing you with an instant discount ON TOP of the radio station’s lowest negotiated price plus great added value.