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Where Is the Value in Radio?

November 6, 2014

When the idea of product placement comes to mind, we often think of television or the movies. Perhaps we picture the massive red Coca-Cola glasses conveniently placed in front of each judge on American Idol, or the famous ‘Junior Mints’ episode of Seinfeld. Whatever it may be, the value of product placement, endorsed or not, is flooding the media scene, and it’s not limited to video.

Much like video, every second of radio is impacting our thought process. Whether it is a commercial, song, or two hosts casually discussing their plans for the weekend, someone, somewhere, is being influenced.

If you’re reading this, you’re probably already aware of Nielsen’s study showing that radio delivers a 6:1 return on investment. This is great news for radio, but what kind of value exists outside of paid commercials?

According to the folks at Front Row Analytics, the answer seems promising. The Philadelphia-based corporation has invested in platform exposure analysis, and its most recent findings showcase the monetary value of brand mentions to the public. In February of 2014, Australian rock band “5 Seconds of Summer” released their hit song, “She Looks So Perfect.” In that song, Los Angeles-based clothing manufacturer and retailer American Apparel is mentioned in the chorus, earning it a total of four name drops each time the song is heard. Based on audio mentions and online views, the value “She Looks So Perfect” adds to American Apparel is $12,478,751. Not bad for a company that had no part in earning a mention in 2014’s unofficial summer anthem.

We have been able to determine ROI for the advertisements that radio stations air (thanks, Nielsen) and the songs that we play (tip of the cap to Front Row Analytics), but how can we determine the value, if any, for the remaining air time? What type of impact do our hosts have? While I can’t put a dollar number to it, I can assure you that there is plenty of value here as well.

According to the USC Annenberg School for Communications and Journalism, radio listeners have a personal connection with radio personalities. Three-quarters (75%) of adults with a favorite radio personality will tune in to a station because they know their favorite personality is on air. And, 72% of these adults talk with friends about their favorite personalities or program content. Whether the personalities are raving about the newest restaurant in town or sharing a recent bad experience, they are impacting the future decisions of others.

So, what does all of this mean for radio?

It means that our airwaves are overflowing with influential power, 24 hours a day, seven days a week. It means that, although we are excited to promote our 6:1 ROI with the world, we are much more than a paid platform of advertising. We are entertaining and informative. We are audio companions. We are influential at any given moment.

If we, as an industry, can grasp and truly believe in the impact that we have on so many lives, buyers will do the same. The content is on air, and millions are listening.

-Tyler Plahanski, Sales and Marketing Associate