Radio advertising has been around for decades, but is it the right platform to promote your small business? Deciding what to spend your limited advertising budget on can be a difficult choice, especially with TV, digital ads and lead generation platforms being avenues to consider.
Advertising on radio remains an affordable way to market your business and see returns on that investment. Depending on what type of business you have, it’s worth considering if radio can still play a role in your marketing mix.
Like other forms of marketing, from picking up local leads to letterbox drops, radio advertising can be a highly local way to grow your business. By running ads on your local radio station, you can specifically target your service area.
Want to learn more about radio advertising costs and how it compares to other advertising platforms? Read on to learn everything there is to know about radio advertising in Australia today.
Is Radio Advertising Still Effective in 2022?
Yes, radio advertising can still be effective for small businesses trying to advertise locally! It’s a cost-effective way to advertise a business in a community or service area, although businesses with state- or nation-wide service areas will find it less economic.
While the internet has negatively affected other forms of traditional media like TV and print, the amount of money spent on radio advertising continues to increase each year.
So how effective is radio advertising in Australia? An online study found that people who heard an advertisement on the radio were roughly six times more likely to visit the brand’s website. In addition, the same study statistically proved that people who continue to hear the same ad are more likely to purchase from that company.
The study found that after hearing an advertisement just once, there was a 9% chance a listener would look up a brand. After hearing the same commercial again, there is a 36% chance they’ll look into the offer, suggesting repetition makes a big difference to how effective radio advertising can be.
Pros And Cons Of Radio Advertising
Radio advertising has evolved dramatically in the past few decades. Since the advent of streaming services, radio has gone from being an inferior medium to TV to having a true resurgence while TV fades into obscurity.
Pros of Radio Advertising
Radio is a unique & evolving medium
Standard free-to-air TV programming has become completely obsolete while radio still serves a unique purpose, providing a truly random assortment of music that requires no setup, plus news and weather updates all while commuting.
Another reason the radio has remained so prevalent in the modern media landscape is how easy it is to listen to it throughout the day. Almost all cars on the road have a radio built in, meaning radio advertising will be around for years to come.
Radio ads can target a local service area
If you have a local small business, radio advertising can be a great way to cheaply advertise your business within your service area. If you’re trying to grow a plumbing business, for example, anyone hearing your ad will be close enough that they can benefit from your services.
Cons of Radio Advertising
Less cost-effective for large service areas
Radio ads aren’t ideal for all businesses though. If your small business is IT support or bookkeeping for example, you aren’t limited to people within a local service area. Because you can provide online IT support and bookkeeping services, you’ll see a much better return on advertising that reaches a broader audience.
For a business like that, digital advertising will usually have a better return, as you can reach more people, and are only limited by your available work hours. These businesses can really benefit from online lead generation where the number of leads accepted can be tailored to your capacity.
Lack of demographic targeting
Digital advertising has provided small business owners with a tool that radio advertising never could: highly targeted ads. If you are advertising online using Google or social media, you have much greater control over:
• Who is seeing your ads
• When they are seeing them
• How often they see them
• What type of ads they see
• Which platforms they see them on
Having this level of control over your ads is something unachievable in radio advertising, and helps you get the most return out of your investment.
If you are a small business owner, you don’t have an infinite advertising budget, so it’s important to make the most out of the money you spend, by investing in ads that you have control over, and have the best chance of converting a viewer into a customer.
Requires longer-term commitment and repetition
To plan, record and air a radio ad generally requires a commitment of weeks to months, with little ability to vary or customise the ad once produced. You’ll also need to commit to regular air time, especially if you want the best value for money.
If a radio ad proves to be ineffective, it’s more difficult to make changes depending on how your audience responds, which can lead to a low return on investment. If you end up with your books full, on the other hand, you may have already committed to running the ad over a set period.
On the other hand, digital advertising allows more opportunity to learn and adapt as you go.
Less predictable return on investment
Especially if you’re planning and recording a radio ad yourself, you can never be certain exactly how it’ll be received. Particularly if you need work on a seasonal basis, or you’re finding yourself short on clients, betting on a radio ad to bring in business can be a risky endeavour.
Getting quality paid leads also allows you to spend exactly what’s needed to top up your books – while not paying for ongoing air time you don’t need, or risking a low return on investment. If you can’t risk your ad ‘flopping’, or want a predictable return on your marketing spend, digital platforms can provide the certainty you need.
How Much Does Radio Advertising Cost in 2022?
Radio advertising starts at $1000 a week for commercial radio advertising and can be as little as $50 a week on community or local radio stations. There are a range of factors that influence the cost of radio ads.
The cost of radio advertising will depend on:
- Length of advertising campaign
The length of the advertising campaign will be the first thing that will affect your cost, with long-term campaigns typically receiving a discount the longer it continues.
- Frequency and timing of ads
The frequency they play your ads is another contributing factor to how much you’ll be spending on your ads. Having your ads playing more frequently and during peak listening hours will end up increasing your costs.
- Choice of radio station
Finally, the radio station you choose to work with will affect how much you’ll need in your advertising budget. The more popular or central a radio station is, the more they can afford to charge. Working with a community or online radio station will bring those prices down significantly, at the cost of lower listenership.
Having a wide range of radio station sizes and audiences to choose from will help you make the right decision on which station, if any, is right to advertise with. For example, if your small business is locally based, advertising on a local or community radio station can help pick up more clients in your service area at a fraction of the cost or advertising on a national commercial station.
What Types Of Radio Ads Are There?
Within radio, there are three main types of on-air advertising: corporate ads, commercial sweeps and sponsored segments. Each type of radio ad has its own pros and cons, so will be most effective for different types of promotions.
Understanding the difference between the different types of radio ads will help you choose the right one to promote your business.
Commercial sweeps are the standard type of radio ad you likely hear during your commute. Ranging between fifteen and thirty seconds long, a commercial sweep gives you the freedom to fit as much or as little information into that time as possible. Working with the ad engineers will allow you to make best use of that time from scripting to background music.
Commercial sweeps are generic and can be played at any time throughout the day.
Sponsored segments are fairly common across all media platforms, not just radio. In a sponsored segment, a brand or company can pay to “bring the listeners” to a show or segment. A sponsored radio segment will refer to the sponsor multiple times throughout the ad and is often more expensive.
Sponsored segments work best when the brand aligns with a segment or speciality show that shares a common audience. For example, a mechanic sponsoring a car segment or specialty show.
A corporate sponsorship is a shorter ad that plays more frequently for a longer amount of time. Corporate sponsors are usually grouped together as brands and companies that “support” the station. Corporate sponsors also appear on physical promotional branding and have their logos frequently seen on social media and websites.
Corporate sponsorships often play multiple times throughout the day and you’ll get a much longer campaign with a smaller investment.
How Long Is A Radio Ad?
A radio ad can be fifteen, thirty or sixty seconds long. In some unique situations, a radio ad can go even longer than that. The different lengths of ads come at different prices and give businesses a lot of flexibility.
Individual radio stations have different rules regarding how much of their hourly content can be filled with ads. For example, a commercial station can play roughly fifteen to eighteen minutes of ads per hour.
In comparison, a community station usually has less than five minutes per hour to fill with ads. Depending on the type of radio station you are advertising on, they will have different options for commercial lengths.
What Makes a Good Radio Ad?
A good radio ad is short, succinct and gets your information to listeners in a way that is easy to understand and remember. Radio ads are generally shorter than thirty seconds long, and any ad that can effectively relay information about your business in that time is a good radio ad.
As radio is an audio medium, creative use of audio, music and sound effects are essential in creating a good radio ad. A good radio ad is one that is able to combine spoken word content and audio to project a message to listeners in a memorable way.
Types of Radio Stations in Australia
There are three main types of radio stations: commercial, community, and online. Within “radio” as a whole, new branches of the medium have become more popular.
Commercial radio is a mainstay, while community radio has made a resurgence with local community groups, and online radio is a new niche that’s making radio more accessible to people around the world.
Commercial Radio Stations
Commercial radio is the gold standard for radio ads. It’s probably what you’re thinking when you hear the phrase “radio advertising”. Commercial radio stations like Mix 94.5 have large listnerships with big budgets behind them.
Pros Of Advertising On Commercial Radio Stations
Commercial radio has a huge listenership – People listen to it for the mix of music, the hosts, and to get their news, traffic and weather all from one convenient place on their drive to and from work. It becomes a part of people’s daily routine, and so it’s especially effective to run repeat ads.
Commercial radio has audience retention – Unlike TV, which is more or less being phased out by streaming services and on-demand services, commercial radio retains its large listener base. Part of that listenership is coming back every day because they are invested in that brand or some part of the station, be it the hosts or the music. The huge amount of people coming back to listen to commercial radio every day is the biggest pro for the platform.
Commercial radio is high quality – Another reason many people work with commercial radio stations is the high quality of work. When you have an ad produced for online or community radio stations, there is a lower threshold for ad quality. When advertising on a commercial station, you’ll know that any ad they produce for you will be of high quality, and will reflect well on your business.
Cons Of Advertising On Commercial Radio Stations
Commercial radio is expensive – One of the biggest drawbacks of commercial radio advertising is the cost. No other medium has the same characteristics and listenership as commercial radio, so they can afford to, and do, charge a premium for that service.
Commercial radio listeners will change stations during ads – Another thing to be aware of is that people tend to ‘channel hop’ the same way they used to with TV. For people that just want to listen to music, an advertisement is going to interrupt their listening and make them change stations. While this isn’t the case for every radio listener, if you are on a tight advertising budget, you likely can’t afford to spend money advertising on an expensive platform like commercial radio where you have no guarantees about listenership.
Community Radio Stations
In the last few decades, local and community radio has seen a true resurgence. People who generally listen to commercial radio on their commute are changing to community stations for a few different reasons. Community stations like HFM are more community focused, putting emphasis on announcements and services that affect and help their local broadcast area.
Pros Of Advertising On Local Radio Stations
People tune in for fewer ads – Community radio stations have a limit on how many ads they can play within an hour, so for some commuters, that’s reason enough to change from commercial radio. Another common complaint about commercial radio is the talkback to song ratios.
People will go out of their way for local information and news – Local radio is often more music-focused, which is another huge benefit of local radio. People will switch to it for the music and stay for your ads. Advertising on local radio is beneficial simply because it isn’t commercial.
Community radio is cheaper than commercial – Because of the generally lower number of listeners, community radio stations charge less for their advertising. If you are working on a budget, advertising on community radio is certainly a good option.
Your ad will play more often – Community radio stations have a certain amount of time they can fill with ads, but they are not always filled with sponsors. If the community radio station you are advertising with doesn’t have enough sponsors to fill their blocks, there’s a good chance yours will fill the space. That means that you have the potential to get more airtime than you’re paying for.
Cons Of Advertising On Local Radio Stations
Fewer overall listeners – Community and local radio stations have listenerships a fraction of the size of commercial radio stations. If you need your ad to be heard by a massive amount of people, local radio advertising probably will not be efficient or effective. For example, if your ad campaign is for an event you need lots of attendance for, advertising on local radio is going to hit a much smaller pool of people than you’re looking for.
The audience is localised to a specific area – As the name suggests, local radio is also highly localised. If the radio station is outside of your service area, it’s unwise to use them as your advertising platform. In addition, if you are advertising a product or service that’s available around Australia, it might be more worthwhile to spend a bit more on your advertising campaign and advertise elsewhere.
Online Radio Stations
Online radio is a fairly new landscape and provides a new and unique way to reach listeners. Although it is a newer concept, it is still a viable platform for advertising. Online radio stations like Pirate88 exist solely online and broadcast to a much wider potential audience through the internet.
Pros Of Advertising On Online Radio Stations
Online radio has dedicated listeners – Since listening to online radio isn’t as quick as simply turning the key in your car and having it play, the people listening are usually more invested in that station than the average commercial station listener. Listeners of online radio are statistically more likely to respond well to ads they hear because of their eagerness to support that station.
Your online radio ads are much more targeted – As online radio stations work through the internet, there is much more knowledge about who is listening at any given time. By extension, you have much more control as an advertiser when promoting your brand. Using the online tools available, you can ensure that only people within your target audience heard your ads.
Cons Of Advertising On Online Radio Stations
Online radio currently has much smaller listenerships – At the end of the day, online radio is still a fairly niche product, and you are dealing with small numbers of listeners. One of the most serious advertising concerns with online radio today is a lack of listeners.
Online radio isn’t locally targeted – By virtue of online radio being an internet medium, it means that listenerships are more global. It would be extremely unlikely for most people listening to an online radio station to be in the same local area. Because of this, if you’re promoting a local pest control business or lawn mowing service, online radio advertising won’t be time or cost-effective.
How is a Radio Ad Created?
A radio ad can be created by you, by the station themselves, or an external company that specialises in production. Creating the ad yourself is the cheapest option, but won’t provide you with the same quality as you would get if you paid a professional to do it.
Hiring an external production company yourself, or through a radio station, will allow you to receive the best quality advertisement possible. A third party production company will have high end production software available, as well as a large pool of vocal talent to choose from.
They will also have a much wider supply of sfx and audio, and have the experience necessary to produce a high quality ad that will get results. However, as this is a premium service, you will be paying a premium for it. If you aren’t on a budget, a dedicated production company is an excellent choice.
All radio stations are equipped with the software and hardware needed to record and produce radio ads. Depending on what radio station you work with, they will have different levels of expertise but will still be able to produce a serviceable ad.
You will have a smaller pool of vocal talent if you have an ad produced in house at a radio station, and the vocal talent won’t necessarily be trained professionals, but you will be saving money by having it done in house, compared to the cost of working with a professional production company.
If you have some experience producing audio yourself, you can attempt to make a radio ad yourself. You’ll be saving money on production fees, but you’ll be left to find the vocal talent and SFX yourself.
You’ll also need to ensure your ad has been made to a high enough quality. Most radio stations will have a bitrate requirement, and won’t accept ads that aren’t high quality enough. In addition, you also have to ensure that any audio you use you have the legal rights to, and no audio is copyrighted.
Although this is a far more cost effective option, unless you have experience producing ads to be streamed over the air, it’s often more convenient and more efficient to have it produced by either a radio station, or by a professional production company.
Is TV Advertising Better Than Radio Advertising?
There is a case to be made that radio advertising is better than TV advertising. But even though streaming services continue to cannibalise the TV watching audience, there is still a hold-out market of people who watch free to air TV regularly.
To decide if TV or radio advertising is better for your product, you need to ask yourself:
- Will My Business Do Better On Radio Or TV? – Some businesses do better on TV while others excel on radio. If you run a business that paints home interiors, your ads are going to play a lot better on TV than on radio, where a vintage record shop would see better business. It’s important to consider the people engaging with the platform you plan to advertise on, not just your budget and location.
- How Big Is My Business? – The size of your business will definitely impact what platform you choose to advertise on. A small, locally based business likely won’t have the budget or see the benefit in paying for a TV ad campaign that plays across Australia.
- Who Is My Target Audience? – When choosing between TV and radio advertising, it’s important to consider your target audience. If your target audience is ‘middle aged homeowners’, putting an ad on TV between 5pm and 7pm on a week night is going to lead to better results than a radio ad campaign that airs at midnight on the weekend.
- Does My Ad Need To Be Visual? – If your ad requires your product or business to be seen and witnessed, then TV is the only option of the two that will be beneficial. Radio is an audio medium and there’s nothing you can do about that.
- What Is My Advertising Budget? – Depending on its size, your advertising budget may only allow for a certain type of advertising. Generally, TV advertising is more expensive than radio advertising.
- Is There A Minimum Buy Requirement? – Both radio and TV stations have the option to implement a minimum buy requirement for their advertising services. These minimums are usually either a minimum amount of weeks the ad is live, or a minimum amount spent on the ad campaign.
If you’re currently comparing TV and radio advertising, be sure not to overlook digital advertising and lead generation platforms. In fact, the very best marketing strategy for your business may combine several of these tactics, for a well-rounded promotional campaign.
When comparing marketing strategies for your business, you may also want to learn more about these options:
- Is Yellow Pages Advertising Still Worth it in 2022?
- Are Business Cards Still Relevant?
- Do Letterbox Drops Still Work?
- The Best Exclusive Local Leads Platform in Australia
How Much Should I Spend On Advertising For My Business?
For a medium-sized business, the average advertising budget is between $1,000 and $2,000 per month. However, the size of your business, your budget, your service area, and the products you offer will all impact your monthly advertising budget. With a good return on investment, the more you spend on marketing, the more revenue you can expect to receive.
Is Facebook Advertising Better Than Radio Advertising?
Facebook advertising might be better than radio advertising, but it depends on your business. For example, if your business is a gym with a younger target audience, Facebook advertising can be very beneficial, more so than radio.
However, if you own a vintage record store, radio advertising might make more sense. Having a firm understanding of your target audience will allow you to determine whether Facebook ads or radio ads are better for your business.