The Sales Impact of Radio - PowerPoint Presentation

Slide1

The Sales Impact of Radio

A

L

ook at Radio Performance for

Department Stores & Telecom

Nielsen 2015

ROAS

study

ROAS: Return-On-Ad-SpendSlide2

For too long we’ve been dealing with

anecdotal

evidence of performance not empirical data

We now have empirical data

We must be the evangelists!Slide3

Who conducted this research?

Nielsen

did

Largest global

marketing research firm worldwide

Also measures

TV, Online, VOD

So has no horse in this race---completely

unbiased

Nielsen would

never put their name

on any research that couldn’t

withstand the scrutiny

of research experts worldwideSlide4

Background:

DEMO A18+

RESEARCH OBJECTIVE

To measure the

sales impact

of radio advertising

Department Stores

4 Brands

Test Period: Q3 2014

Pre Period: Same Time Prior Year

Telecom

1 Brand

Test Period: Q1 2014

Pre Period: 3 months priorSlide5

C

apable

of

m

ea

s

uring radio, television and Internet broadca

sts, retail video

and audio broadcast

s.

Nielsen’s

PPM

Audio Technology:

To record Listening

PPM encoding solution identifies broadcast and online audio content

1.

The meter, worn all day,

detects the watermark embedded in the audio broadcasts

2.

Data collected by the meter are sent to Nielsen Audio

3.

M

e

t

er

au

t

o

m

a

t

i

c

ally

de

t

ects inaudible codes embedded in audio portion of broadcast program or commercial.

Proprie

t

a

r

y

c

odes

iden

t

i

f

y

m

edia

t

o

w

hi

c

h

par

t

i

c

ipa

n

t

is e

x

po

s

ed.Slide6

This listening

d

ata is then

Matched

to

Media

Monitors

commercial

occurrence data (Was the listener tuned in when the commercial ran) Nielsen Audio ReportingNielsen Audio Panelist Exposures – Radio Commercials

Matched to Radio Commercial Occurrence Data*Slide7

This information is then

fused

with credit and debit card

purchases

SINGLE

SOURCE

(Individual) DATABASE

PURCHASE

BEHAVIOR: Credit & Debit Card Expenditures of 125 MM unique cardholders 80%+ US credit card transactions 30% of US debit card transactions12B transactions accounting for $1.2 trillion spent annuallySlide8

It boils down to this….

Comparing the purchasing habits of those exposed to the commercial and those not exposed to the commercial

They match

Radio PPM listening

with

Media Monitors commercial occurrence data

to determine if the participants were

exposed

to the advertiser’s commercial and if they were exposed they determine how purchasing behavior (via their credit and debit card records) differed from those not exposed to the commercialSlide9

3 PILLARS THAT DRIVE ROAS- Return-On-Ad-Spend

BUYERS SPENDING MORE PER TRIP

BUYERS SHOPPING MORE OFTEN

MORE

BUYERSSlide10

EXPOSURE TO RADIO CAMPAIGNS DROVE A

+

10

%

INCREASE IN SALES OVERALL

* Ad spend source is SQAD

RADIO BROUGHT IN

MORE SHOPPERS AND THEY SPENT MORE EACH TIME THEY SHOPPED

6% increase in dollars spent per buyer

3% increase in

total number of buyers

$356,966,946Incremental spend

for customers exposed

to the Q3-2014 radio campaigns

$20,999,788

*

Total Q3 2014 radio ad spend

$17 ROAS

IMPACT OF RADIO EXPOSURE

RADIO AD INVESTMENT

Q3 2014 - Four brands - Compared to same time prior year

DEPARTMENT STORES

$17 OF INCREMENTAL SALES FOR EVERY $1 SPENT ON RADIO

Long term will be higher- residual effectsSlide11

EXPOSURE TO RADIO CAMPAIGNS DROVE A

10%

INCREASE IN SALES OVERALL

* Ad spend source is SQAD

RADIO BROUGHT IN

MORE SHOPPERS

AND THEY SPENT MORE EACH TIME THEY SHOPPED

6% increase in dollars spent per buyer

3% increase in

total number of buyers

$356,966,946Incremental spend

for customers exposed

to the Q3-2014 radio campaigns

$20,999,788

*

Total Q3 2014 radio ad spend

$17 ROAS

IMPACT OF RADIO EXPOSURE

RADIO AD INVESTMENT

Q3 2014 - Four brands - Compared to same time prior year

DEPARTMENT STORES

$17 OF INCREMENTAL SALES FOR EVERY $1 SPENT ON RADIO

Develop into loyal customersSlide12

EXPOSURE TO RADIO CAMPAIGNS DROVE A

10%

INCREASE IN SALES OVERALL

* Ad spend source is SQAD

RADIO BROUGHT IN

MORE SHOPPERS

AND THEY SPENT MORE EACH TIME THEY SHOPPED

6% increase in dollars spent per buyer

3% increase in total number of buyers

$356,966,946

Incremental spend for customers

exposed to the Q3-2014 radio campaigns

$20,999,788

*

Total Q3 2014 radio ad spend

$17 ROAS

IMPACT OF RADIO EXPOSURE

RADIO AD INVESTMENT

Q3 2014 - Four brands - Compared to same time prior year

DEPARTMENT STORES

$17 OF INCREMENTAL SALES FOR EVERY $1 SPENT ON RADIO

Radio advertising impacted behaviorSlide13

EXPOSURE TO RADIO CAMPAIGNS DROVE A

10%

INCREASE IN SALES OVERALL

* Ad spend source is SQAD

RADIO BROUGHT IN

MORE SHOPPERS

AND THEY SPENT MORE EACH TIME THEY SHOPPED

6% increase in dollars spent per buyer

3% increase in

total number of buyers

$356,966,946Incremental spend

for customers exposed

to the Q3-2014 radio campaigns

$20,999,788

*

Total Q3 2014 radio ad spend

$17 ROAS

IMPACT OF RADIO EXPOSURE

RADIO AD INVESTMENT

Q3 2014 - Four brands - Compared to same time prior year

DEPARTMENT STORES

$17 OF INCREMENTAL SALES FOR EVERY $1 SPENT ON RADIO

Long term will be higher- residual effectsSlide14

EXPOSURE TO RADIO CAMPAIGNS DROVE A

10%

INCREASE IN SALES OVERALL

* Ad spend source is SQAD

RADIO BROUGHT IN

MORE SHOPPERS

AND THEY SPENT MORE EACH TIME THEY SHOPPED

6% increase in dollars spent per buyer

3% increase

in total number of buyers

$356,966,946

Incremental spend for customers exposed

to the Q3-2014 radio campaigns

$20,999,788

*

Total Q3 2014 radio ad spend

$17 ROAS

IMPACT OF RADIO EXPOSURE

RADIO AD INVESTMENT

Q3 2014 - Four brands - Compared to same time prior year

DEPARTMENT STORES

$17 OF INCREMENTAL SALES FOR EVERY $1 SPENT ON RADIO

Develop into loyal customers

Radio advertising impacted behavior

Long term will be higher- residual effectsSlide15

43%

HISPANICS 18+

10%

10%

PERSONS 18+

AFRICAN-AMERICANS 18+

DEPARTMENT STORES

% Change TOTAL SPEND

DEPARTMENT STORES

HISPANIC AND AFRICAN-AMERICAN INSIGHTS

Previous Nielsen study Q1 2014 also showed that Hispanic ROAS was larger than general marketSlide16

+22

%

2014 study: Hispanic

consumers show higher response to campaign exposure

Hispanic radio dollar share point gains by advertiser

Source: Nielsen Catalina Solutions Studies of 3 radio ad campaigns, March 26, 2014 indexed to general market share point gains from studySlide17

+19

%

Black radio average dollar share point gain by advertiser

Source: Nielsen Catalina Solutions Studies of 3 radio ad campaigns, March 26, 2014 indexed to general market share point gains from study

2014 Study: Black

consumers show higher response to campaign exposureSlide18

* Ad spend source was Client Provided Budget

$210M

Incremental spend

on Telco Brand by customers

exposed

to radio campaign

$15.3M

*

Spend on radio

$14 ROAS

IMPACT OF RADIO EXPOSURE

RADIO AD INVESTMENT

SOURCE: Nielsen Buyer Insights P18+ Telco Brand campaign (1/1/14-3/31/14)

TELECOM

$14 OF INCREMENTAL SALES FOR EVERY $1 SPENT ON RADIO

The Telco company radio campaign

reached almost 88 million people (P18+)

in PPM markets

Telco company

buyers

exposed

to radio campaign spent $8 more per month

than consumers who were not exposedSlide19

TELECOM

MILLENNIAL AUDIENCE INSIGHTS

During the campaign period, Millennials exposed to the campaign had double the increase in monthly spending

for the Telco company’s products and services ($16 increase in monthly spending vs. $8 increase for A18+ exposed audience).

Not only do

Millenials

listen to Radio they respond to its commercialsSlide20

RADIO DRIVES ROAS FOR DEPARTMENT STORES

AND MANY OTHER CATEGORIES

RADIO PAYBACK PER $1 AD INVESTMENT

Q3 2014

Q1 2014Slide21

RADIO DRIVES ROAS FOR DEPARTMENT STORES

AND MANY OTHER CATEGORIES

RADIO PAYBACK PER $1 AD INVESTMENT

Q2 +Q3 2013

Retail A +B average out to $17 as wellSlide22

RADIO DRIVES ROAS FOR DEPARTMENT STORES

AND MANY OTHER CATEGORIES

RADIO PAYBACK PER $1 AD INVESTMENTSlide23

A

$3 or $4 ROAS is still

strong and noteworthy

Retail and Department stores ROAS will always be

higher

for

two

reasons:- Higher ticket items than chips, candy and soda- Market basket potential: i.e. I go to purchase the product advertised in the department store but end up buying other products in various departmentsSlide24

Now let’s put these Radio ROAS results into some kind of perspectiveSlide25

Below came from a recent Bloomberg article

Ron Amram works for Heineken

“Late

that year

he (Amram)

and a half-dozen or so colleagues gathered in a New York conference room for a presentation on the performance of the online ads

.

They

were stunned. Digital’s return on investment was around 2 to 1, a $2 increase in revenue for every $1 of ad spending, compared with of at least 6 to 1 for TV.”Makes Radio’s performance in both ROAS studies look pretty good!Slide26

Advertising Age

What

Medium Scores Highest ROI? It May Be Radio

Nielsen

Catalina Study Shows Big Returns for Small Outlays

Published on March 25,

2014

Brands averaged a sales lift of more than $6 for every $1 spent on radio ads – an

ROAS double that of even the best results from many recent studies of digital or TV media, including one from France and Coca-Cola that Facebook recently touted.Slide27

A little noted fact from the 2014 Nielsen study

Found

that radio delivered a powerful sales lift when heard within a few days of purchase. A consumer exposed to an ad

within a day

of purchasing increased the brand share by

+

9

%, while messages delivered 28 days prior to purchase increased share by

+3.4%.Speaks to the importance of continuing brand presence- Being there!Of delivering a message within the window of opportunity— one of Radio’s key strengthsRecencyGreat Book written by Erwin Ephron: titled Media PlanningEphron was named on of the 5 most influential people in media in the past 25 yearsSlide28

There are other benefits of Advertising beyond immediate ROAS

Neutralizing

effect

:

No business competes in a

vacuum

.

Maintaining

a current customer base and revenues against competitive advertising “conquesting” designed to take what you’ve gotMaintain share of mind: Share of mind= share of market Share of mind is accomplished by maintaining a marketing share of voiceLong term Brand building—establish a competitive “firewall”Long term positive impact of “legacy” advertising- advertising just keeps givingImpacts other non ROAS metrics necessary for short and long term successAwareness- only thing that grows in the dark is a mushroom. Business/revenue doesn’tIntentConsideration- can’t buy from if your not in their consideration setAffinityAdvocacy- word-of-mouth- best type of advertisingSlide29

Affinity / Likeability

Awareness

Average % Lift

:

Radio-targeted consumers vs. Control groups

Studies conducted while at Katz: Advertisers

see lifts in

5 key branding

metrics

when Radio is used in marketing campaigns

AdvocacyConsideration

Purchase Intent

+ 17%

+ 23%

+ 19%

+ 38%

+ 37%

Source: Radio Advertising Effectiveness Program, Ipsos OTX, 2010-13; conducted for Katz Marketing Solutions

.Slide30

Creative can account for as much as 75% of a campaign’s impact

Creative can make 100 GRPs perform like 200 GRPs or 50 GRPs

Likeable

Emotive

Factual

Informative

Motivating

Differentiating

Average of Top Quintile 56%

45%72%69%

42%43%Average of Bottom Quintile

26%

15%

25%

20%

13%

14%

Buy

Believable

Soft Sell

Share

Talking 2 Me

Entertaining

Average

of top ads

70%

85%

50%

58%

69%

75%

Average of Bottom Ads

27%

52%

19%

25%

41%

35%

To be read: the top ranked commercials on average were ranked as likeable by 56% of the respondents vs the bottom ranked averaging 26%. Slide31

Need some world class creative ideas?

Good artists borrow, great ones steal

Go to:

www.radiomercuryawards.com

and

search archives - you can search by category, advertiser, year,

etc.Slide32

Summary

$17:1 ROAS Department stores

$17: ROAS Retailers- Key local account

$14:1 Telecom

Beats TV

Other studies on the way

Additional benefit of Advertising: Neutralizing conquesting, SOV, SOM, branding

Dramatically impact 5 key brand health metrics- awareness, intent, consideration

Practice discussing and presenting this info. Any questions, just callSlide33

Questions

bob@uppingthevolume.com

Cell: 203-585-7815