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Radios ROI Advantage
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Agenda
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What is RAL?

• The Radio Ad Lab
• Founded in 2001
• Objective research about how Radio advertising
  works in the U.S.
• Distinctive Attributes
• Active participation of advertisers and agencies
• Serious financial commitment of the Radio
  industry

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What is RAL?

• Recent Contributions
• Personal Relevance, Personal Connections How
  Radio Ads Affect Consumers (August 2004)
• Benefits of Synergy Moving Money Into Radio
  (December 2004)
• Research Compendium, White Papers, Case Studies
  and more.
• All available for free at www.RadioAdLab.Org

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Project Background

• RALs Quest to Measure Radios ROI
• To provide the missing piece for the Radio
  effectiveness puzzle
• The third 2004-2005 research investment by RAL

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Prior ROI studies

• A Rare, Prior Test of Radios Sales Impact
• A Canadian project with Imperial Margarine tested
  Radios actual effects on sales compared to
  television.
• Concluded that Radios impact can equal TVs when
  weight is equal.
• Plus, additional Past Studies Implied Better
  Radio ROI, but did not include cost evaluations.
• Average Radio spot tends to yield 80 of TVs
  recall and persuasion
• (See the RAL White Papers series at
  www.RadioAdLab.org)

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The New Project

• Additional Past Studies Implied Better Radio ROI.
  But RAL wanted to know more from a real world
  test
• More specific cost data for ROI measurement
• More products and advertisers
• More markets
• More duration
• And in the U.S.

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The Research Firms

• Millward Brown
• 9th largest research organization in the world
  with presence in 60 countries.
• Over 1,000 brand tracking studies being conducted
  at any one time.
• History of over 30,000 copy tests.
• Information Resources, Inc. (IRI)
• The leading global provider of enterprise market
  solutions for CPG, Retail and Healthcare
  industries.
• The only company in the industry with a Six-Sigma
  program for data quality.
• An active presence in markets where 80 of the
  worlds market research dollars are spent
  including operations in the US, Europe and Latin
  America.

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The New Project

• The Millward Brown/IRI Concept
• Control TV exposures via 4 IRI BehaviorScan
  markets
• Control Radio exposures simultaneously using
  test and control markets -Two markets with
  Radio, two without
• Six months in duration
• Multiple advertisers
• RAL Research Committee Review
• Advertiser/agency/broadcaster review and approval
  of design and subsequent communications

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BehaviorScan Markets
Developed for marketing tests, including control
over media exposures.
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Controlling TV Exposure

• IRI BehaviorScan Markets
• IRIs Targetable TV technology creates a no-ad
  environment within a select market by cutting
  over existing TV advertising on all broadcast and
  cable channels
• Affects the dominant cable system in these
  smaller markets
• For RAL, half the homes received our ads, half
  did not

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Adding Radio Controls
Market Level Controls through Use of Incremental
Radio
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Additional Controls

• IRI In-depth Analytics
• Measured Household purchasing via shopper cards
  scanned at the Grocery Store level
• IRI also accounts for other variables like
  pricing, promotion, competitive activity
• Allows for isolation of the effects of various
  media combinations

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Three Sources of Data

• Sales Measures from IRI
• Scanned grocery purchase data by household by
  cell
• In-market marketing activity (promotions,
  competitive activity, etc.)

• Ad Campaign Data
• Volume by TRPs (Target Rating Points)
• Spending
• Telephone Surveys from Millward Brown
• Pre/post surveys
• Saliency, ad/media awareness
• Brand consideration and behavior
• Advertiser-supplied question(s)

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Requirements

• RALs Requirements
• Number of Radio weeks at least equal to TV
• Radio weight 50-100 TRPs per week
• Radio affidavit monitoring
• Related creative content
• TV scheduling information for IRIs cutouts
• Ad cost information available to IRI
• (Note To mirror real world situations, no
  pre-testing of the radio creative was required.
  The TV campaigns had received prior positive
  pre-testing scores.)

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The Advertisers

• Four Advertiser Partners
• Grocery Food
• Grocery Non-Food
• Over-the-Counter Drugs (two very distinct
  products)
• Advertiser Requirements
• Confidentiality
• Limited-period exclusive access to category data
• RAL presents only aggregated data (across all
  advertisers)
• Cost Sharing
• RAL covered all direct test costs (1 million)
• Advertisers covered Radio ad costs for two
  markets
• Advertisers/agencies covered Radio campaign
  management costs
• The Campaign Testing
• Began on or after September 27, 2004
• All ended by March 13, 2005

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Campaign Details

• Network Radio Usage
• Several advertisers were regular
  network Radio
  users
• Those campaigns continued during the test
• The advertisers incremental buys
  outweighed the
  base network radio by about 41

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Campaign Details
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The Results
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Results in Two Steps

• First Step Actual Sales Results
• IRI first accounts for numerous factors outlined
  in the research paper, including
• Historical usage of test and competitive brands
• Key demographics
• The effects of Pricing, Displays, Promotions
• Result An estimated sales lift percent
  attributed to our ad campaigns in isolation

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Results in Two Steps

• Second Step Factoring In Ad Costs (ROI)
• The overall sales effects
• Before accounting for costs
• Without accounting for campaign weights
• (Media combination details available in the
• full research paper at www.RadioAdLab.org)

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Heres What We Saw
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Sales Effects Overall

• Radio Clearly Moves Product
• Statistically significant increase in sales from
  incremental Radio
• Radio Moved Product Alone and When Combined with
  National TV
• See the full paper for more details
• Lets see what happens when costs are considered

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Estimating Ad Costs

• The Challenge Compare Apples to Apples
• Incremental Radio ads were purchased in Cedar
  Rapids,
• Eau Claire, Midland, and Pittsfield
• Television ads were part of a national TV
  campaign
• (broadcast and cable networks, and
  syndication)
• The Solution Nationalize Radio Campaigns
• To Network Cost Equivalents
• RAL agency partners translated Radios test TRP
• levels to equivalent cost of network Radio
  buys

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The Simple Summary
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Key Telephone Data

• Millward Brown provided pre-/post-campaign phone
  surveys for directional support for the IRI data
• Three key questions posed to 7,234 respondents
• Total Unaided Brand Awareness
• One Brand Used Most Often
• Your First Choice The Next Time You Buy
• Simple summary Radios pre/post effects compared
  to TVs pre/post effects

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Telephone Results
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Conclusions

• Radios ROI Advantage is a major milestone
  in understanding Radio advertising

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Conclusions
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Conclusions
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The Simple Summary
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Radios ROI Advantage
More Information Radio Ad Lab (800)
364-3239 Info_at_RadioAdLab.org