Realistic information about radio advertising costs to help you budget your radio advertising campaign.
Radio Advertising Costs : How Much Should I Spend?
“How much should I spend on radio advertising?” “How do I know I am getting the best radio advertising rates?” “What radio stations should I advertise on?” “What are good and bad radio advertising prices?” “How many spots should I air on a radio station?”
Every day at Radio Lounge,Guest Posting we hear radio advertising questions such as these.
Honestly, there is so much confusion about radio advertising floating around – we can’t blame you for asking these questions. Why is advertising on the radio so mysterious? The answer is – radio advertising is not mysterious. It just helps to know how it works.
Effective radio advertising relies on two major components – the message (the radio commercial itself), and the media (that the radio spot airs on).
Let’s look first at the radio commercial itself. Before even thinking about which radio stations to air on, or how much to spend on radio advertising rates, you must think about what you are going to say in your radio ad. For this article, we are assuming that all call centers, fulfillments, websites, etc. lead generation, and sales closing processes have been put in place by you, the advertiser. Creating a radio commercial that helps drive traffic is extremely important to the advertising process.
The advertising industry is full of voice talents, radio personalities, DJ’s and others, all claiming to create radio commercials. Be careful here. When entering the arena 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 pulls traffic. Some radio stations provide 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 have to be created by an overworked radio production person in a five to fifteen minute window of time. Remember, you usually get what you pay for.
The most effective radio commercials are built on a solid, proven strategy. The copy is written using time tested formulas that maximize potential response. The talent is handpicked to best connect with the end user and the production is based upon clear, quality, and easy to absorb audio.
So…what does the radio commercial production process cost? The majority of radio commercials that work best usually fall into the $500 to $1000 price range. There are always exceptions to the rule (lots of revisions to copy or audio, additional voice talents, celebrity endorsements, etc.) but this figure generally covers development of a solid strategy, copy from experienced copywriters, performance by high caliber voice talents, and the highest quality production services.
For many with questions about radio advertising rates, and radio station prices, here is where the mystery begins. We will try to simplify the mystery of radio media buying as much as we can in this small amount of space.
A good radio advertising buy focuses on a few different things:
* Finding the best radio stations in a market that match your customer’s demographics (age, gender, income level, etc.) and psychographics (interests, beliefs, hobbies, personality traits, etc.).
* Finding the dayparts that best reach your target customer. Mornings? Middays? Afternoons?
* Selecting the top radio stations that most efficiently reach the highest potential customers, the right 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 down to finding the best station (or stations) at the best price, the radio advertising process becomes a little more challenging.
Here is how we tackle the process at Radio Lounge and determine how much to spend on radio advertising costs. Within the market you want to advertise in, we 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 different demographics than a News/Talk, or Soft Rock station. After we select a group of radio stations, we contact those stations to let them know we are thinking about advertising on their radio station. We ask for specific data from the radio stations called “rankers”. This is ratings data that most radio stations can provide based on specific requirements we have requested. From this point, we have a good idea which stations perform the best in our target demographics.
Once we have narrowed down the radio stations to just a few that will effectively reach our target customer, we then request a proposal based on certain criteria – dayparts, frequency goals, etc. From these proposals, we can see who reaches the target audience most efficiently – using tools like Cost Per Point (ratio of spot rate to ratings percentage), Cost Per Thousand (ratio of spot rate to audience category totals), etc. If a radio station is not competitive, we will often ask the station to resubmit a more competitive proposal. But, how will we know if all of the station’s radio advertising rates are too high. Radio Lounge has access to data that allows us to compare proposals against historical figures to determine if radio station prices are in line with market averages. We negotiate, and help execute the purchase.
Great…but what does this cost? It depends on the size of the market you wish to advertise in as determined by Arbitron (the radio ratings services). Radio advertising rates can be as high as $800 per 60 spots in a top market like New York City, or as low as $3 per 60 spots in Kerrville, TX. How will you know what to spend?
Here’s a valuable system we have used from our history of working with radio advertising rates. The system is based on a solid branding schedule that may run one spot per day in the morning drive, one per day at midday, and one per day in the afternoon drive – Monday through to Friday, and two spots on Saturday and Sunday. That’s nineteen spots a week at sticker price. This type of schedule is good for achieving a desired frequency level of three (meaning the average listener to a station will hear the radio commercial at least three times). Under these broad assumptions, you can use the following chart as a rough guide to budgeting your radio advertising campaign.*
*Note, these are gross rates and do not include production costs or agency discounts. These are market averages for the standard radio schedule mentioned above, actual costs may vary. Different combinations of dayparts on different stations may cost much less.
* Markets 1 -5 (ex: New York City, Los Angeles, Chicago, etc.)
Expect to pay from $4000 to $8000 per week/per station for a top performing station.
* Markets 6 – 20 (ex: Dallas/Ft.Worth, Houston, Phoenix, San Diego, etc.)
Expect to pay from $2000 to $5000 per week/per station for a top performing station.
* Markets 21 – 50 (ex: Denver, Cleveland, Kansas City, etc.)
Expect to pay from $1000 to $3000 per week/per station for a top performing station.
* Markets 51- 150 (ex: Akron, Syracuse, Baton Rouge, etc.)
Expect to pay from $800 to $2000 per week/per station for a top performing station.
* Markets 150+ (ex: Myrtle Beach SC, Green Bay, Topeka, etc.)
Expect to pay from $500 to $1500 per week/per station for a top performing station.
You may be saying, “Wow! That can be expensive”. Relax, these are standards and radio advertising schedules come in all shapes and sizes. Sometimes, schedules are smaller depending on advertising goals and objectives. However, we do recommend that you are able to commit to the range of minimums.