INSIGHT IN SECONDS: RAB RESEARCH 'RADIO: THE ROI MULTIPLIER'
Mike Williamson, head of AV planning, gives us his thoughts on RAB research Radio: The ROI Multiplier - which shows how radio can unlock millions in untapped revenue for advertisers.
- This varies by sector with retail performing best, returning L18.90 for every L1 invested.
- Radio delivers the highest ROI by media for the following categories: Automotive, Finance, Leisure & Entertainment, Retail & Travel.
- For FMCG brands, the average ROI was lower than expected for radio, but the best performing FMCG case study delivered L24.00 ROI, higher than any other media.
- It sounds fairly obvious but radio has traditionally been seen as “a frequency medium”.
- 40% weekly radio reach results in 3% sales uplifts per L100K spend.
- This is backed up by three of Carat’s biggest radio clients (British Gas, Go Compare & Asda) who buy around 40% weekly reach.
- To achieve 40% weekly reach, the investment is only L75K (net) a week (depending on the timelength and target audience).
- When radio share is above 20%, the average ROI is L8.20.
- This share of spend does seem high but successful (profitable) clients like British Gas invest at around this level.
The optimal level of radio investment is 20% of a total media plan, at which point overall campaign ROI is 8.5% higher.
The RAB research Radio: The ROI Multiplier suggests that to maximise ROI, advertisers should consider:
- Increasing share of spend on radio to around 20%, subject to media mix.
- Maximising radio weekly audience coverage (rather than optimising frequency).