Make Radio Advertising Work for You

Competition in any free market is expected to be fierce, and companies must try to make the best use of all available media. One such option is radio advertising. The cost to avail of this medium depends on several factors, not least of which is geography. Thus, the same spots and running times costing $7,000. in Los Angeles may only set a company back $500 in Wayne, New Jersey.

Notwithstanding this, however, the factors expected to influence the cost of radio advertising include the number of station listeners when the ad is run, the listeners' profiles, your competitors for the spot, and your negotiating skills.

Radio stations present their proposal by listing the number of spots and the times of day for the airing. A clueless advertiser may then base his decision on the cost per spot, which is not ideal as the number of listeners actually listening during each time spot may widely vary. For example, 2 am is expected to have significantly fewer listeners than 8 am. A radio station may therefore make its proposal attractive by offering a very low cost per spot, but the client would actually find its ad airing at very odd times.

A more relevant measure, therefore, is Cost Per Point (CPP) or Cost Per Thousand (CPM). CPP refers to the cost needed to communicate to 1% of the population of a specific area. This information is especially useful in comparing the costs of various advertising media. CPM looks at the cost to reach a thousand people, and this would normally play within the $10 - $20 range. A publication offers more reliable data on these relevant statistics but these would likely entail subscription costs.

The second consideration is listener demographics. In general, an advertiser should expect costs to be higher for stations whose listeners are primarily male falling within the 18 to 35 age range. An older audience would mean cheaper air time, so expect to pay more for a station that counts listeners mainly within the 25 to 54 age profile. Wealthy listeners also mean more expensive spots, as classical music stations would attest.

An advertiser's competition for the spots would also highly impact the costs. Elections are thus a bane for most advertisers, as well as sale seasons like Christmas and Thanksgiving.

Finally, radio advertising costs are influenced by the advertiser's negotiating skills. Negotiating well may mean receiving discounts you would not otherwise have enjoyed. It is always best to go to the negotiating table armed with data like the station's rate card and your own budget. This way, you can ask for concessions that may otherwise not be offered.