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Direct Response Radio Advertising

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One reason it's a difficult question to answer is that the list of what works is so long. Much longer than what doesn't work. One look at the following list of businesses, products, and services categories that have found success with direct response radio advertising shows how true this is.



Financial Services (loans, insurance - think GEICO among others, debt consolidation offerings, different brokerage product offerings and the like), Intellectual Property or informational products (wealth building, parenting, fitness, anxiety/stress reduction, weight loss, and other similar types of products), Nutritional Supplements (solution specific products targeted at any of the various top health concerns), Beauty (skin, hair, teeth, weight), Fitness (promotions for various home fitness products and routines), Seminars (promoting an upcoming seminar in specific markets), Hard Goods (computers, radar detectors, other new or specialized productions), Retail, driving traffic in support of bricks-and-mortar as well as web retail sales. Examples are sites like Priceline.com, eHarmony.com, and Overstock.com. Retailer Home Depot is one of the biggest radio advertisers. Other business categories include auction web sites, discount buying sites, music, computer repair, employment, and Lasic eye surgery.

This is also a difficult question to answer because the question itself is a bit misleading. It carries two underlying assumptions: one, that that radio advertising itself is the center of the business success, and two, that there are hard and fast rules about what will or won't (or can or can't) "work" in radio.

We can see the first assumption more clearly when we realize that the type of advertising employed is a tactic in support of achieving business goals, not a business model itself. Radio advertising, like any advertising medium, can most powerfully impact one part of the business: the customer acquisition. Direct response radio, TV, and print can primarily promise to deliver a new customer at the lowest possible cost, or CPO. It's up to the rest of the business model to cultivate that new customer into one that has as positive a lifetime value as possible.

The second assumption is dispelled when we recognize that the desire for hard and fast rules is misleading when it comes to assessing the potential of direct response radio advertising. The biggest misconception that we hear about radio advertising is the one that goes something like "if a product has to be demonstrated before anyone will be interested, it won't work on radio". Yet this has been disproved many times. Let's take the classic direct response category of skin care.

There was a time in the direct response world when everyone thought that skin care products could only be successfully advertised with DRTV or DR print because potential customers just had to see the before and after results. But that assumption has been proven to be completely incorrect as many skin care companies have made - literally - hundreds of millions of dollars (in profit, not just revenue) resulting from direct response radio advertising.

These skin care marketers have proved the one fundamental axiom of direct response radio advertising: When the radio creative is done expertly, it is possible to do two key things that are required for success in direct response radio: 1) create a vivid impression in people's minds that captures attention, and 2) to convey information that entices the potential customer to take an action that the business has a plan for turning into a long term customer. When a campaign reportedly fails in radio, it's usually not a failing of radio per se, rather a failing of the application of radio advertising to the campaign in question.

For those direct response marketers or business owners who just want to know whether their product or service has a chance of achieving profitable growth with direct response radio, we offer this advice.

First, make sure you have something unique to offer the world - whether it's a unique product, product characteristic, offer, or otherwise. You can be different or innovative in many different aspects of your offering, but if you bring a "me too" offering to the table, you'll get poor results.

Second, have a plan to maximize lifetime value of the customers you'll acquire. The focus can be on the first sale, with upsells and conversions from free offers. Or the focus can be on cultivating additional transactions with each new customer. The best approach is a combination of the two.

Third, test - because as we've demonstrated above, the list of what works in radio advertising isn't set in stone; it's long and growing. You can't know for sure whether you'll be successful until you test. One of the most attractive aspects of direct response radio advertising is that relative to TV and print radio requires so little money and time to learn of the profit potential of your campaign.
Direct Response Radio Advertising
Successful radio advertising campaigns require that certain fundamental pieces of information about the product (or service), customers, and business be clearly understood by everyone involved in the effort. Sales, marketing, customer service and the radio advertising agency should all have the chance to provide input from their perspective, and all of these groups should be operating with the same set of complete information.

Without this foundation of common understanding, the chances of your radio advertising campaign being successful are diminished. Why? Because you slip from a methodical, disciplined approach to building your business profitably with direct response radio advertising to a more haphazard and risky approach that relies on luck. Successful direct response radio advertisers earn their way to great wealth by taking a disciplined approach. The questions we'll outline below are to be answered as part of just such a disciplined approach and they are meant to be addressed during the pre-launch phase of building your radio advertising campaign.

In many respects, building a successful direct response radio advertising campaign requires a mentality akin to that of a researcher. Researchers uncover knowledge about a particular topic. The first step in research is identifying the problem you are trying to solve. In the case of direct response radio advertising, you are trying to solve the following “problem(s)”:

· Creative: which advertising appeals will result in the highest number of most qualified leads?

· Media: which target audiences are most responsive to the product's advertising appeals?

Answering these questions will minimize your media CPO, thereby maximizing your radio advertising (and overall business) profitability.

The list of questions that follows is aimed at guiding any potential radio advertiser down the road to solving the above “problems”. The answers to these questions are the input into creating and testing a hypothesis (again, thinking like a researcher) about which combination of radio advertising appeals and radio media targeting will result in the most profitable radio advertising campaign.

The 10 Key Questions

Note: we'll use the word “product”, however the following thought process is also applied to services, events, and other items that are promoted in direct response radio advertising campaigns.

Product Questions:

1. What benefits does the product provide to its users? What problems does it solve? In what ways does the product make the user's life better? Be sure to identify key claims that can legally be made about the degree of benefits to the product user.

2. How does the product work? It is important to note that this is input information only. One of the biggest mistakes in creating advertising of any type is an over-emphasis on features and not benefits. Discussing how the product works can lead advertisers astray, into the world of the “neat” factor and out of the world of what matters to your target customers - what the product does for them.

3. How is the product different? Be sure to compare the product to alternatives or substitutes, as well as to competing products. Also include information about any patents, trademarks or clinical test results.

4. What offers may be used in the radio advertisement? For example, is there a free trial, free shipping, or a bonus quantity with purchase?

5. What are the distribution channel(s) that will be used for the product? (Web, retail, direct)

6. Are customer testimonials, expert endorsements, or a corporate spokesperson available for use in the radio ad?

Customer Questions:

Answering the following questions requires at least some customer research. It may be primary research (for example, conducting a qualitative focus group or a quantitative survey), or secondary research (reviewing qualitative or quantitative research compiled by others about your product category that you can apply to your specific situation). Don't overlook your current customer base and results from prior tests as a source of valuable customer information, but be aware that this data will not be randomly collected (i.e. to some degree your current customers will be a reflection of the advertising that brought them in). In any case, research will not spell out the exact appeals that will be successful for your specific direct response radio advertising campaign, which is why in-market testing occurs in the next phase.

7. Who is the target consumer segment? Describe them in terms of age, sex, socioeconomic, demographic, geographic, or other relevant dimensions.

8. What are the strongest motivations for this customer segment to buy this type or class of product? What does the customer hope to gain by purchasing, and what loss would the customer avoid by purchasing?

9. What objections or excuses might the customer use to delay or avoid buying the product? What is the answer to each of the objections or excuses?

Business Question:

10. How will you measure success? This a very important question and the one most often unanswered going into the testing phase. Ideally, you will know exactly what media CPO (cost per order) is required for you to achieve break-even profitability. Armed with this information, you'll have a context with which to view the results of advertising tests. Without it, you are in danger of either pulling the plug on a profitable campaign or rolling out an unprofitable campaign.

Conclusion

Once you've answered these questions, you're ready for the next step. It's time to pull together a well-rationed hypothesis about which set of appeals, distilled into a creative approach that ultimately ends up as a radio ad, is likely to work the best. This is a challenging phase because it entails dealing with a large amount of information and a large number of alternatives. Additionally, identifying appeals is only the first step - articulating those appeals is also very important and nuanced. Most often your radio advertising agency will conduct this exercise because they're experienced in dealing with these challenges, but it should be iterative with the client team.

Almost always it turns out that more than one creative approach seems to make strong sense. This is appropriate because you will ultimately test a minimum of two approaches (two different radio ads) since what we are trying to learn is which approach works best. As this is a comparative exercise, it requires comparing two ads. For more information on how to conduct a successful testing phase in building a direct response radio campaign, see our article on that topic. It's located in the Article Library on our web site (http://www.strategicmediainc.com).
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