• How effective are radio ads for small businesses? Is radio advertising right for all businesses? How much does it cost?
• If you do decide to run a radio ad, you might also like to consider other types of advertising to enhance the effectiveness of your campaign.
• In this guide, we cover the fundamentals of radio advertising and what you need to do to get started.

There aren’t many people who sit around the wireless as a family listening to the radio anymore, but radio audiences are actually on the rise.

According to Commercial Radio Australia, more Australians tuned into live and local commercial radio throughout 2017 than ever before, with an average cumulative audience of nearly 10.5 million people listening each week in metropolitan areas, growing the audience by more than 200,000 people.

Even younger audiences grew, with weekly listeners in the 18-24 years old age group increasing from 76% in 2016 to 79% in 2017. 

Radio advertising has been around for nearly 100 years now, with the first radio advertisement broadcast in 1922, advertising a new apartment complex in Queens, New York.

At the time, this was one of only three advertising mediums to choose from. The other two being out of home (poster and billboards) and print (magazines and newspapers). 

In today’s world, we now have many more advertising and marketing channels to choose from including TV and an ever-growing range of digital channels such as social media, search engine marketing (SEM) and digital banners, which can make advertising investment quite daunting.

So when should you choose to invest in radio advertising and what kind of businesses can benefit most from this investment?

Who Listens to the Radio?

A recent study by Roy Morgan suggests that Australians who are employed full time are more likely to listen to the radio. But each radio station will have their own audience profile that you can request to confirm whether your ideal customers are listening to that particular station or not.

As a starting point, use your common sense to help identify whether your ideal customer is likely to be listening to the radio based on the following lifestyles and behaviours: 

• Tradies – tradies often listen to the radio throughout the day at work.
• People who drive regularly – mums with kids, professionals who drive to work, salespeople and taxi, uber and truck drivers often listen to the radio en-route. 
• People who work in retail or hospitality or spend a lot of time at shopping centres and cafes – often retailers, cafes and restaurants will play the radio during daytime business hours for ambient background music. 

Remember, you can only advertise on commercial radio stations and you may be able to sponsor a community radio station in exchange for having a brand promo read on air, but you cannot advertise on the ABC.

If your ideal customer is an ABC listener, radio advertising may not be your best bet.  

When Is the Best Time to Advertise on the Radio?

Morning and afternoon drive times always attract the largest audience but that also makes them the most expensive time slots. The cheapest time to advertising is usually during the ‘graveyard shift’ between around 12 AM and 5 AM, so this can be a good way to enter the radio market on a budget.

But again, you really need to consider whether your ideal customer will even be listening then. If they are not a shift worker or a student studying late nights, chances are your ad spend will be totally wasted and fall on deaf ears.

Use your common sense, but you can also speak to the radio station’s advertising sales manager who will help you identify the most relevant time slots and frequency of advertising to suit your budget and reach your ideal customer. 

How Much Does Radio Advertising Cost?

To even consider radio advertising, you need some marketing budget.

The budget required to achieve an effective marketing result will depend on the radio station you advertise with, with rates ranging from a couple of hundred dollars to sponsor a community radio station through to tens of thousands of dollars for commercial radio stations. 

If you have a really large budget, a media buying agency will help you purchase airtime, but if your budget is under $30-50k, approaching the radio stations yourself is your best bet. 

Community Radio Advertising Budget

If you’re a local business who relies on local foot traffic or your advertising budget is under $1,000, consider sponsoring a local community radio station that offers brand promos or sponsorship announcements in exchange for sponsorship. 

Community radio stations will also usually have a specific community, cause or style of music that they support, so you need to ensure that your business values are aligned with that of the station.

If they are, this can be a great way to gain local community support for your business and generate goodwill as a sponsor amongst listeners. 

You won’t have much control over when and how often the station plays you sponsorship announcement, but it will give you a taste of what radio can do for your business without having to spend thousands of dollars. 

Businesses that may benefit from community radio:

• Local café, bakery or restaurant.
• Local service businesses – hairdresser, automotive, accountant, lawyer, etc.
• Cause or community-based businesses such as local sports teams, health and fitness centres, etc. 
• E-commerce business that aligns with the values or mission of the station.

Commercial Radio Advertising Budget

Venturing into commercial radio advertising requires a bit of a larger advertising budget. To really have a good crack at commercial radio, you’re going to need to set aside a couple of thousand dollars, at least. And that will only cover airtime over a month or two.

So if the thought of spending $5,000 in a couple of months on advertising scares you, then starting with digital advertising where you can start with a lower budget to test the effectiveness may be more your style.  

Approach a couple of commercial radio stations and ask to speak to their advertising sales team. The advertising sales team will be more than happy to talk to you if you’ve got a few thousand dollars to spend and they will help you plan a radio campaign to suit your budget. 

Questions to Ask When Purchasing Radio Ad Slots

Things to ask the sales reps and compare across stations:

• Audience profile - look for evidence that a large volume of your ideal customer base are listeners. 
• Advertising packages within your budget. 
• Options to include digital promotions (on their website) or added value they can offer alongside the air time. E.g. listing on their website, graveyard bonus slots, etc.

Things the sales reps will generally able and happy to help you with:

• Time slots and frequency of advertising will optimise your budget and overlap with your ideal customer. 
• Whether to record a 30 second or 15-second commercial.
• Scripting and recording of the commercial (it’s generally not an option to record your own as the tone and style will need to fit with their station)

What Type of Businesses Benefit from Commercial Radio Advertising?

Types of businesses that may benefit from commercial radio advertising:

• Hospitality and food and beverage businesses
• Health and beauty and lifestyle brands 
• Service businesses
• Ecommerce businesses

Food and beverage brands, restaurants, bars and cafes – if you’re in a food business, the radio may be great for your business.

You may have noticed fast-food franchises often advertise on the radio around mealtimes. This is because people need to eat and they are open to suggestion when hungry. The timing needs to be near mealtime though and the frequency needs to be often.

Service businesses that are consumer-facing and have broad appeal e.g. tax accountants, workers compensation lawyers, real estate agents.  

E-commerce businesses that have websites that are easy to remember and find and products that can be easily explained and understood on the radio. 

What Should You Include in Your Radio Ads?

New product announcements, sales and special offers or promotions are a great time to run a radio ad campaign. You can always run general brand awareness ads, but it’s much better to give the listeners a reason to visit your online or physical store straight away, also known as a call to action. 

The two main things you want to get across in radio ads (and any other type of ad) are:

1. Your brand
2. An irresistible reason to contact your business or buy your product

Make sure when the radio station is helping you with scripting that these two things come across really clearly. Ideally, mention your brand at least twice throughout the ad. Once at the start and once at the end. 

What Other Forms of Advertising Could Boost Your Radio Advertising Effectiveness?

If you do decide to run a radio advertising campaign, you might like to consider investing in other types of advertising to help enhance the effectiveness of your campaign. Other advertising channels you may want to consider include:

1. SEM/Google AdWords
2. Social media advertising
3. Out-of-home advertising 

1. SEM/Google AdWords

This may assist with search optimization for people who search for your brand online. Make sure you include keywords included in your radio ad that is relevant to your category.

Google AdWords can be a very cost-effective way to optimize search without having to pay for SEO optimisation. This is effective for local businesses and can be beneficial for e-commerce stores depending on the category and cost per click. 

2. Social Media Advertising

Advertising on Facebook or Instagram so that your brand and products appeal multiple times in front of your audience. In case they forgot to google you, they will have a second reminder to take action and click through. This is particularly beneficial for e-commerce stores. 

3. Out-of-Home Advertising/Billboards

If you have a physical store, combing radio with out of home advertising can be particularly effective for people driving past your signage and listening to your ad on the radio. This is a much more expensive strategy though. To execute well would require a marketing budget of $50k+ and ideally getting a media buyer involved. 

Is Radio Right for My Business?

To recap, there are a couple of strategic questions you should answer to help you decided whether radio advertising is right for your business?

1. Who is my ideal customer?
2. Does my ideal customer listen to the radio? If so which stations and when?
3. Does my brand have a local appeal or broad state-wide appeal?
4. Can my brand or product be easily explained and understood in 30 seconds on air?
5. How much money can my business comfortably allocate to radio and is this the best use of our marketing budget? 

What if the Radio Is Not for You…?

If all this sounds way too scary and expensive, and you’re just not ready to commit to radio advertising yet, consider starting with a smaller advertising budget that you can scale up or down on a daily basis using social media advertising or Google AdWords.

With Facebook and Instagram, you can allocate as little as $5 per day per ad to test the effectiveness and around $10-$20 a day to Google AdWords. 

Google AdWords works really well for local businesses with products that people are already searching for e.g. yoga studios in South Yarra. 

Facebook and Instagram advertising is generally a better option for start-ups or if you have a new product that not many people are searching for yet. e.g. Mum’s job sharing app.