Howard Stern may make your stomach turn, but his talk show sells, say small-company CEOs who buy radio airtime. Unlike music listeners, who are anxious for commercial-free time blocks, talk-radio fans are primed to listen and respond. And direct marketer Vermont Teddy Bear (VTB), in Shelburne, Vt., takes advantage of the welcome reception to sell its custom-dressed teddy bears.

The company has been spending 95% of its marketing budget on radio (a third of that on talk shows); it began locally and now advertises in the top 10 major metropolitan areas. VTB attributes its growth -- to $10.7 million last year, from $300,000 in 1988 -- almost entirely to radio response to its 800 number. Listeners call to order a bear, or, more often, to send a "beargram" for about $60.

CEO John Sortino swears by "live reads." Radio personalities read VTB's scripts on the air, lending the product credibility that a canned ad wouldn't. The company also insists that the deejay reading an ad send a beargram to someone he or she knows, at VTB's expense. Bears dressed as pilots, doctors, and brides are sent to deejays' friends and relatives, who call to thank the deejay. "We get great reactions, and they talk about that on the radio," says marketing director Barbara Haase. Deejays sometimes even run over allotted script time to describe their beargram experiences.

VTB says other national (and more costly) advertising vehicles just can't compare. "When we started advertising, we weren't sure what visual image we wanted," says Haase. "On radio we could talk about the emotion of receiving a bear." The signal is loud and clear: from the 800-number response, which is tracked daily, a list of more than 500,000 fans has been made.

Last year VTB did a mailing to 200,000 radio listeners. The response persuaded the company to launch a direct-marketing campaign this Christmas. -- Phaedra Hise

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Laura Morandin of the Radio Advertising Bureau suggests that companies interested in radio advertising contact the two largest rep firms for radio: Interep Radio Store (212-916-0700) and Katz Radio Group (212-424-6490), both of which can arrange regional and national buys. Or call radio stations directly, as Vermont Teddy Bear does. For a quick overview of facts and figures, get the Radio Advertising Bureau's free 13-page booklet "Why Radio?" by calling 800-232-3131.