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Thread: Is advertising worth it?

  1. #1

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    Is advertising worth it?

    I am curious just how effective radio advertising is? Obviously something's working since this has been the model for some 60 years, but I'm curious just how well it actually works. For instance, it seems like you can't go anywhere without hearing some kind of car adds, whether they be adds for a brand or a local car dealer. How could it be profitable for the company or dealer when there's going to be two or three competitors in the same hour? Not only that, but I don't know anyone who is going to buy a car simply based off of a radio ad for a certain brand or dealer. The same applies for home improvement chains or the national insurance advertisers. I know there is some level of effectiveness, in fact I've seen it myself. However, the one example I like to give when I point out how effective radio advertising is was for something that you're not likely to hear about from multiple companies, and multiple times an hour. Even if it was, I could participate in all of such events, and may not form a preference to one or the other. However, when my parents buy a car, they do research on what kind they want, then when that's done they go to the closest dealer. When we need stuff for the house we go to Home Depot because it's right down the street, that's also why we like Safeway. When I was going to school, I went to Safeway because that's what I was used to, though sometimes I'd go to Wallmart if I just wanted to walk rather than take the bus, and if I needed something in addition to groceries I'd go to Fred Meyer. You probably didn't need to know all those specifics, but the point was that, while all of these chains advertise on radio, it didn't factor at all into the decision to go to them. So, how well does radio advertising really work? I would think the business doing said advertising would want some kind of return on that investment, and they won't advertise if they don't get that return.

  2. #2
    On any advertising platform, the more you dominate the chosen medium, the more effective it is. After decades of writing and producing radio commercials, I can tell you that it's also about having a good message. "For all your (fill in the blank) needs", doesn't work. It's trite. It doesn't speak to the consumer. Go back and listen to stuff from Dick Orkin's Radio Ranch or Chuck Blore who understood how to use the medium to sell and created emotion in their messages. Of course, these days, there are more platforms vying for the listeners' attention, and that makes radio a more expensive medium for the smaller businesses to use. Not to mention the 10 and 12 unit stopsets I hear. I could go on, but I still believe that reach and frequency combined with a creative message will be effective. But the ROI won't happen overnight.
    "It's a shame what's happened to radio, but they can't afford to do it anymore."

  3. #3

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    There are various purposes for advertising. Top of mind awareness is a biggie.

    I think limited time sale advertising is the most expensive and likely not worth it. For example, the number of people with a car is many but the number buying a car this weekend is very tiny. No matter the offer,you're not buying unless you are in the market for one.

    Top of mind advertising can do wonderful things. I actually witnessed this: in an office the copier quit working and they needed to call someone to fix it. They didn't know who. One person mentioned a company name and another person in the office said they had heard of them. The consensus was they must be the best company to call,so they looked them up and used their service not even knowing a things about the company only that the name was familiar. I was selling radio then and this made a big impression on me on how advertising worked.

    A guy that went to work in the marketing division inventory control portion of the Wrigley Gum empire was on a plane with Mr. Wrigley. Fairly new in his position he sought to make an impression on Mr. Wrigley. He used a magazine of about 60,000 circulation where they bought a full page ad for "Juicy Fruit". The new fellow noted there were no other ads for chewing gum in the magazine, that it had a fairly low circulation and that the company could save money by buying a much smaller ad or no ad at all. Mr. Wrigley listened and asked a question: "Son, what's the #1 selling chewing gum?" The new hire answer "Wrigley". Mr. Wrigley then said, "That's right and that ad keeps us #1". Mr. Wrigley knew the value of top of mind awareness.

    When I started selling radio advertising after years on the other side of the building, I too wondered if it worked. I asked my Dad that had managed a large bookstore (for the time). He hardly ever bought newspaper and didn't have the budget for TV. He said radio advertising is a mystery to him. In the years he advertised he never could point to a single person or single sale he could attribute to 'results' from advertising.

    He decided to stop advertising to see if it worked. Sales dropped across the board by 10%. Each week he thought it was a fluke, but by the 4th week he figured it must be doing something. In fact the home office was asking what was up. He began the same advertising schedule again and the first week he started, sales jumped by 10%. He believed advertising, at least as far as a bookstore went, produced a 10% increase. He bought a typical weekly total audience plan on carefully chosen stations that reached the demographic that was know to be heavy readers.

    One observation: to jump start a website, you advertise on TV and radio because they reach the masses. To be found by search or accident is not the way to go. Even online banner ads seem to be much less effective unless very targeted to a very unique niche.

    Radio is frequently thought of as ineffective because other media requires all the senses to utilize. Radio does not. With radio you can visit with friends, drive and even work. The message gets in your head even if you're doing something else. You don't have to remember all the details,just enough to get you to the business and the truth is a consumer only gleans what they want from all advertising, just enough to create the reason to go to the business.

    A well written commercial, artfully produced and especially if it creates water cooler talk, really gets the job done. The art is always to not obscure the message with the art. Sometimes you remember the art but not the message.

    As pointed out, ROI is not immediate but the curve is based on consistent long term advertising. Most suggest 90 days before you start to see an ample return. I contend it is based on the product advertised. If groceries, fine but an oil change business might need up to a year. I think it depends on consumption period.

  4. #4
    And then you have this scenario: For many years Lou Grubb had a Chevrolet dealership in the Valley. He was a heavy, but very low key, advertiser on both radio and TV. You had to pay attention to his ads because they didn't scream at you - unlike the majority of other dealers. If I was in the market for a new car I would have bought one from him just to support what I liked about his thoughtful advertising. Unfortunately, I do not like anything produced by GM so Chevys were outside my list so his ad dollars were wasted on me but his message wasn't.

    Another great example are the early VW ads. Great advertising but questionable products. Same with Anheuser-Busch. Great classic ads. Terrible beer but it sells well because of its Gemutlichkeit (good feeling).

    As someone already noted.....the successful ad needs to hit the target when he/she is in the market for said product otherwise it is just a contribution to the medium.
    Illegitimi non carborundum

  5. #5

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    Landtuna and B-Turner, you guys both bring up good points. I've actually experienced the same thing you have B-Turner, but in a slightly different situation. Those that know me know that anything inflatable pumps me up, pun only sort of intended. So, when I heard an ad on the radio for the Insane Inflatable 5K, I hit the website right away. Had I been ready to do a 5K that day and had they come to my market that year, I would have signed up right there. Unfortunately there's a similar event that popped up on my Facebook page when I liked the II5K page, and as II5K didn't come to Seattle this year, unfortunately they didn't get any of my money. That being said, that, at least for me, while it is the example I cite whenever I talk about how well radio advertising works, is the only example I can really think of when I think about how radio advertising works. I think Landtuna's point was exactly what I was getting at. Sure, you're top of mind when it comes to the product you sell, but if the majority of people don't like your product for whatever reason, what does that get you?

  6. #6

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    Name recognition still works....even when your commercial is annoying. I think everyone in town knows who the dealer Fooorrrrrrrr the People is. Having said that, Google gets credit for radio ads when someone hears the ad then checks out the website

  7. #7
    Quote Originally Posted by gr8oldies View Post
    Name recognition still works....even when your commercial is annoying. I think everyone in town knows who the dealer Fooorrrrrrrr the People is. Having said that, Google gets credit for radio ads when someone hears the ad then checks out the website
    I'm sure plenty of people who've heard the Kars for Kids song far too many times have called 1-800-KARS-4-KIDS when they've needed to dispose of a clunker. For better or worse, it's the most familiar name in the whole racket.

  8. #8

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    It has been mentioned what if you don't need,like or use the advertised product. This actually is not a result of advertising not working but rather it did because although you don't buy the product, you learned of it by advertising being effective.

    You really can't do much about those who don't like or don't need the advertised product. No matter what those sales won't happen. You have to think of those ready to buy and how to get them to consider you. Advertising might reach a wide swath of the population, but it is a much smaller group that is ready to buy now and that's where all your results come from.

  9. #9
    Quote Originally Posted by CTListener View Post
    I'm sure plenty of people who've heard the Kars for Kids song far too many times have called 1-800-KARS-4-KIDS when they've needed to dispose of a clunker. For better or worse, it's the most familiar name in the whole racket.
    Never heard of them nor have I ever heard of "Fooorrrrrrrr the People". Must not be in my market or my very limited radio listening isn't enough TSL.
    Illegitimi non carborundum

  10. #10
    Quote Originally Posted by landtuna View Post
    Never heard of them nor have I ever heard of "Fooorrrrrrrr the People". Must not be in my market or my very limited radio listening isn't enough TSL.
    You've never heard 1-877-KARS-4-KIDS? I thought those ads were nationwide, on all sorts of stations. (And yes, it's 877, not 800.) It's sort of a scam, in that people donate thinking it will help needy kids somewher, but the children actually being helped are middle-class Jewish kids, getting help in receiving a private-school Jewish education rather than a secular public-school education.

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