How to Buy Radio Advertising on a Budget
Video may have killed the radio star, as the old pop song goes, but advertising on the AM and FM airwaves could be an affordable savior for small businesses.
Advertising on radio has consistently proven to be an effective and efficient medium to help generate brand awareness and grow business for a variety of companies and in a variety of geographical markets. But for small and mid-sized businesses that are on a tight budget, it pays to know some tricks of the trade to keep radio advertising affordable.
"Negotiation is key. You have to go in and negotiate what you want," says J. T. Hroncich, managing director and principal of Capitol Media Solutions, an agency that helps companies buy advertising. "There's a lot more to it than placing a simple print ad. You have to look at the target audience your looking to reach, size of your budget and the ratings of the stations you are interested in purchasing."
The sections below will detail how to understand your options for radio advertising, tips for negotiating deals for radio ads within your budget, and other promotional opportunities on radio.
Dig Deeper: Making Your First Advertising Buy
How to Buy Radio Advertising On a Budget: Understand Radio Advertising Options
Despite the rise of television, cable, and the Internet as advertising platforms, radio advertising "still makes sense," says Hroncich. During the recent economic downturn, some businesses stayed away from radio, fearing that as people lost jobs, there wouldn't be as many commuters during drive-time hours. But that seems to have settled down. "It is still really relevant, but a lot depends on the market. If you're in Atlanta, Washington, D.C., or Los Angeles, where a lot of people still drive to work, it's a good platform to get your advertising message out."
Certain types of companies tend to advertise more on radio – auto dealers, banks, jewelers, salons, and so on. They tend to be local and they often provide a phone number, website, or location so that you can reach them. "At the end of the day a lot of them want you to come into the store," Hroncich says.
Often, radio stations will help produce the commercial for you as part of negotiating an advertising deal. "You can give them the copy and they'll create the ad for you, as long as it's a pretty straightforward type ad," says Hroncich. "Most times it is included in the price. Otherwise you can pay $1,500 to $3,000 and up to have an ad created."
Before negotiating, you have to figure out what target market you are trying to reach and then find radio stations and programs that do a good job of reaching those markets. Advertising agencies are often hired to do the research and the bidding for you, and can often negotiate more "value added" features to a contract.
Dig Deeper: On-Air Endorsements
How to Buy Radio Advertising On a Budget: Tips for Negotiating Radio Advertising Deals
The first rule of thumb to save money on radio advertising is to plan early and negotiate a long-term (13- or 26-week) or yearly contract. "Stations very often provide discounts and/or value added for clients who commit to purchasing a designated amount of advertising in advance," says Wendy A. Schmidt, a 20-year radio sales veteran in the Boston market who is a senior account executive for CBS Radio's premier Boston station, WBZ NewsRadio 1030 AM. "When you lock into a longer term, your rate is guaranteed for that contract period against future rate increases, and you do not pay in advance. Airtime is generally billed weekly or monthly only after the commercials air."
If you don't purchase your radio campaign in advance, you are at the mercy of supply and demand, whereby rates may increase as inventory decreases, Schmidt says. And, you may not be able to run your campaign at all if a station is sold out during busy months.
Here are some other tips for buying radio ads on a budget:
- Short durations. Many stations, in addition to offering the standard 60-second commercial, offer advertisers the option to purchase shorter commercials – in 30-second, 15-second, or 10-second intervals. Time is money on the radio and these usually cost less during the same time of day. "Some stations may offer just a 'billboard,' or 'blink ad' – a 5-second, name-only mention," Schmidt says. "Shorter durations are particularly attractive to advertisers on a budget as they are often priced below a 60-second commercial, thus stretching your advertising dollars." If you can get your message across quickly, these shorter durations may be for you.
- Run of station (ROS) commercials. ROS commercials, otherwise known as rotator spots, are lower-priced commercials with a broad window of airtime although there are usually no guarantees when your commercial will air, Schmidt says. The most popular, and thus most expensive, times to run radio ads are during the morning and afternoon "drive time" – the rush hours, when lots of listeners are commuting. But an ROS commercial may air anytime from 6 a.m. to midnight. "While rare, if a station has availability, it is possible to get some prime time commercials at the lower ROS rate," Schmidt says. "Consider purchasing times for which you will be guaranteed to run, and supplement some of your airtime with rotators."
- Fringe days or times. Fringe are the days (or time of day) that are less in demand, or not as highly rated as other time slots, and thus, are priced accordingly, Schmidt says. "Consider midday, evenings, or weekends, when rates on many stations are generally less expensive than during weekday drive times," Schmidt adds.
- On-air features. Outside of standard commercial spots, radio stations often allow businesses to sponsor certain on-air features, such as news, traffic, or weather reports. These typically include a sponsorship mention –"This news report is brought you by [company name]." Schmidt says these features are negotiable items which may or may not require a premium. "While a premium carries an incremental cost, it is well worth the investment to get the additional attention a sponsorship provides. The advertiser's company is then highlighted by the sponsorship mention, making the company stand out."
Dig Deeper: Saving Money on Radio Advertising
