Why AM/FM Radio And Digital Should Be Your Base Buy
While local advertisers have a lot of different marketing options, a new analysis from Nielsen reveals that the most effective media plan consists of a base buy of AM/FM radio and digital solutions.
The 95/5 rule: Only 5% of consumers are in the market at any time
The prestigious Ehrenberg Bass Institute of Marketing Science reports a very small amount of people are in the market for a product or service at any time. Whether it’s a home repair, an automotive purchase, health care need, or furniture, most people are not in the market.
Advertising needs to form around two key strategies. First, convert existing demand by reaching the five percent who are in the market. Usually that takes the form of a sales event.
Second, create future demand. Often this is called brand building. It focuses on the 95% of consumers who are not in the market, not thinking about the category, and not interested in a sales event.
AM/FM radio + digital: The dream team of advertising creates future demand and converts existing demand
With its massive reach and ratings that rival TV, AM/FM radio is ideal for creating future demand and helping businesses create awareness and positive feelings. Digital solutions are perfect for converting existing demand by driving consideration and purchases.
What happens when a portion of a TV + digital plan is shifted to AM/FM radio with no increase in budget?
A media plan consisting of 68% TV, 13% connected TV, and 20% digital reaches 59% of a market. 10% of the media plan is shifted to AM/FM radio. This generates a +28% increase in reach with the same budget.
What happens when AM/FM radio is added to a digital-only plan at a 20% increase?
Three digital media plans with light, medium, and heavy investment were analyzed by Nielsen Media Impact, the media planning platform. Each digital plan was then supplemented with a 20% increase to fund AM/FM radio advertising.
In each scenario, the addition of AM/FM radio generates a significant increase in reach. In the case of the light digital media plan, the addition of AM/FM radio doubles reach. In a medium media plan, the addition of AM/FM radio boosts reach by +41%.
What happens when digital (online video and social) spend is added at a 20% increase to an AM/FM radio plan?
The same dynamic occurs when digital investment is added to four AM/FM radio media plans of various sizes. In all cases, reach increases. A heavy AM/FM radio plan with a 20% digital investment sees reach grow by +24%.
Which is the better plan? A base buy of outdoor, TV, print or AM/FM radio?
Four media plans with the same investment were analyzed by Nielsen Commspoint, the media planning platform. In each case 60% of the investment was placed in TV, outdoor, AM/FM radio, and print. The remaining 40% consisted of digital solutions and connected TV.
The winner: A cross-media plan with AM/FM radio as the base buy generates the greatest market reach
Surprisingly, the media plan with TV as the base buy has the lowest market reach. The AM/FM radio base buy has nearly double the reach of the TV plan with the same investment.