Radio Advertising – A Risk/Benefit Summary of Testing All Available Approaches

(Read this before deciding which strategy makes the most sense for you!!!)

Radio has changed A LOT over the past few years. Online Streaming. Webcasting. Podcasting. Liberal Talkers. Seacrest In, Casey Kasem Out (now, there’s an irony). New FCC guidelines prevent some advertisers, while FTC investigations ban others. We’re Now Paying for Howard Stern. Clear Channel owns well over 1,000 stations, and has tried to rewrite to rules of radio advertising in the process.

And the most relevant item to you the advertiser – with some exception, radio revenues have been down nationally for the second year running. Partially as a reaction to inflated prices. Partially as a reaction to changing listening patterns. With that in mind, there hasn’t been a more practical time to test radio since before the DotCom boom. Example – I recently received rate Live Read quotes from no less than Five Top-10 rated Stations in San Francisco (Market # 4). Imagine my Shock when I was quoted between $150 and $450 for all of them in Prime Run Times (By comparison – clearing any of these for under $1000 was considered a coup back in the DotCom glory days, and $500 to $800 was still considered a great rate as recently as two years ago.)

With all the new changes, how do you know what is the most practical way to test radio for your product or service? Below, please find a summary of all the Positive Benefits AND Potential Risks associated with all major currently available Radio Test Options:


Risk: While an inexpensive way to test and a Great way to stretch your dollars, Remnant is still subject to last minute bumps and a here-today-gone-tomorrow approach. It is very hard to roll out with remnant – you can’t count on the same media you got an 8.3 ROI last week to even be available next week. And that means scrambling to find comparable programming at the last minute. And getting remnant affidavits can be a time-consuming headache.

Benefit: With the fall of radio rates, testing remnant has not been this prevalent or available in quite a long time. I’ve seen deals from 50% to as low as 10% of rate card this year that were unthinkable as recently as last year. And these are in Top 10 stations in Top 10 markets, and Major broadcast networks. Also, with the advent new technologies, companies such as Softwave Media Exchange in New York have made it easier to buy remnant AND know exactly Where And When your spots will air.


Risk: Radio ONLY works with heavy frequency. IN most cases, you really must buy a schedule of 9 to 18 spots per week Minimum. You must run it for at least two weeks, and ideally 3 to 4 to determine the true potential ROI. If your Creative, Media, or Inbound aren’t quite right, it’s a lot of commitment.

Benefit: Radio allows you to OWN the station or show you feel best reaches your audience. Buying this frequency will make your name synonymous with the station you feel matches your target. Moreover, it can allow you to buy the #1-rated shows in a market at a fraction of what #1 Rated Network TV Prime Time will cost you (and with more precise demographic planning). When you buy the top-rated stations in your key demo, you can own a Majority of the market, something very hard to do on television.


Risk: These can be much more expensive then regular canned spots, while needing about the same frequency. It usually takes longer to get a personality to agree to endorse a product, and when necessary, try the product or service to their satisfaction. Live Reads do allow for a risk in a Personality making a False Statement about your company.

Benefit: What other medium gives your the opportunity to be endorsed wholeheartedly by the same “celebrities” who people tune into for information or entertainment? And work your message into the very “shtick” that people tune into them for in the first place? A legit endorsement from a trusted DJ or Host can hold more credibility than a major celebrity that the listener doesn’t feel they “know as well as a friend.” (Remember, listeners hear these people five times each week.) While costs are higher, an effective Live Read can Hugely increase response, and create a buzz amongst core listeners. Stations often offer free added value which ties into activities or feature segments in which the personality participates.


Risk: Still a relatively new Medium to test. If it fails, it does not necessarily mean broadcast radio will fail. Best for Internet-based offers, could hinder a phone-only Call To Action.

Benefit: With companies such as CBS RADIO Streaming their stations more than ever, this IS the emerging technology of the moment. It is still new enough that it can be tested VERY inexpensively (#1-rated Top 10 market stations are currently selling month-long, heavy frequency packages for as little as $1,000). You do get the benefit of out-of-markets listeners as well as your core target.


Risk: Also, still a relatively new Medium to test. And also, if it fails, it does not necessarily mean broadcast radio will fail. XM and Sirius currently charge Per channel, so buying a flight across 20 or so channels can get expensive quickly. And with their early advertiser success and demand to justify stock market values, spot prices are higher than one might expect.

Benefit: Is there a more qualified Direct Response lead in ALL of radio? Think about it – we know they are making payments on a new car, we know they enjoy luxury items, and we know they are billing their subscription to a credit card! I’d call that a “qualified lead”. Audiences are ONLY increasing Every Day – NO other medium can say that. And XM has a no-charge “PAD Dial” feature where you scroll your 800 number or Website across the Radio Panel Screen – AND a button where you can save it for later reference.


Risk: While much cheaper to produce than a TV infomercial (Usually between $5,000 and $10,000), it is much more expensive to product than a :60 spot (usually $500 to $1500). If it fails, it can be hard to get a creative read on why it failed. Changes in offer or copy MUST be planned for – and ideally produced in advance in order to have a contingency plan.

Benefit: Cheaper to test than Spots because you need only buy One to Four Shows per station to get an accurate test. You can test more markets for less money. Some offers benefit from the half-hour explanation in a way that :60 spots simply don’t offer. These are as qualified a lead as you’ll get because you have a Loyal Listener who is paying active attention during a fringe time, and a half-hour to motivate them. It is a better medium to close a high-ticket offer on the inbound call. And it holds its value well – in the past 10 years, prices have not increased all that much (current average national infomercial rate is about $275 per show).

Radio can be your most important medium to test offers – it really does offer the most qualifies leads you’ll ever get. Just make sure your approach makes sense for the long and short-term objectives of your company.

Joe Rashbaum is president of The Radio Solution Company, a radio direct response agency and consulting firm celebrating 20 years of success. Reach him at (805) 279-3391 or inquire below.

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