Radios Advantage

Advertising Effectiveness Study

Introduction
Radio and television are a powerful and commonly used media combination. This study sets out to explore the multiplier effect of a strategy of radio and television in combination over television activity alone across two FMCG clients. In an increasingly cluttered advertising environment and within highly competitive categories such as FMCG, it has become more important for advertisers to cut through and make an immediate impact on audiences. This means exploring media combinations that generate the greatest synergies and engage consumers when they are most responsive. This study shows just how effective a commercial radio and free-to-air television combination is in driving sales and awareness.

Commercial Radio reaches around 80% of Australians each week

Commercial Radio Overview

A high reach medium Commercial radio reaches around 80% of Australians, who each spend on average 2 hours 41 minutes listening each day.* Commercial radio audience is growing In 2005, over 8.6 million tuned in to commercial radio each week, an increase of 1% over the previous year.# Radio cuts through Time Spent Listening (TSL) research shows that people are listening longer to radio than they did 5 years ago. TSL in 2005 was 18 hours 42 minutes compared to 18 hours 33 minutes in 2000, an increase of 9 minutes each week.^ Breakfast listening at a high On average, 6.7 million people tuned into metropolitan commercial radio during breakfast in 2005, up from 6.6 million in 2004.# During the most recent survey period, commercial radio attracted 6.8 million listeners 319,000 more than the same period in 2004 and the highest number of breakfast listeners since at least the year 2000.^** Commercial radio place of listening*
Elsewhere 2% Work 25%

Home 47%

Car 26%

Radio reaches grocery buyers while they shop Commercial radio reaches a large proportion of grocery buyers across the day, when they are most likely to visit a supermarket, delivering messages close to the time of purchase. The majority of grocery buyers shop on weekdays during the morning and afternoon. Commercial radio reaches over 40% of grocery buyers during this time. Additionally, commercial radio reaches 65% of grocery buyers just before they visit the supermarket in breakfast.^^

*Source: Nielsen Media Research, Radio Advisor, average of ve capital cities, Survey #1-8 2005, All People 10+ unless otherwise stated. **Source: Nielsen Media Research, Radio Advisor, average of ve capital cities, Survey #8, 2005, All People 10+ unless otherwise stated. ^ Source: Nielsen Media Research, Radio Advisor, average of ve capital cities, Survey #1-8, 2000-2005. # Source: Nielsen Media Research, Radio Advisor, average of ve capital cities, Survey #1-8 2004 vs. 2005, All People 10+ unless otherwise stated. ^^ Source: Nielsen Media Research, Panorama Survey 10 2005 (Jan-Dec 2005), All People 14+ unless otherwise stated.

Headline Findings
Moving just 20% of your television budget to commercial radio has been proven to increase brand awareness by 22% Even among well known brands, moving just 20% of a television budget to commercial radio has been proven to increase brand awareness by 6% Even among well known brands, moving just 20% of a television budget to commercial radio has been proven to increase sales by up to 15%

Executive Summary
Commercial Radio Australia commissioned Millward Brown to study the effectiveness of radio advertising in contributing to an overall media mix, specically the combination of commercial radio and free-to-air television. The study involved a test and control market. The test market consisted of free-to-air television and commercial radio activity (80% television, 20% radio) and the control market free-to-air television only (100% television). This allowed a better understanding of the impact that a strategy combining both television and radio activity has over television activity alone. Using a structured online questionnaire, pre and post interviews tracked awareness and attitudes for the brands involved. Pre and post product sales data was analysed to determine the effect of the advertising campaign. Key ndings into the impact of this advertising activity for two brands in the FMCG category were explored: Brand A is a niche brand in the broader personal hygiene category. Brand B is a large iconic brand in the breakfast cereal category. Research was conducted between May and July 2005. Respondents were aged 18 - 54yrs and were main grocery buyers who had listened to the radio in the past 7 days. The media investment, as tabled below, would not be considered a large or heavy campaign. CONTROL Brand A: Personal hygiene
$36,220 230 tarps $69,388 250 tarps

TEST
$14,420

Moving just 20% of your television budget to commercial radio has been proven to increase brand awareness by 22%

Radio 17% of budget

Average radio as a proportion of total budget: 20%

Brand B: Breakfast cereal
$30,000 285 tarps $40,000 225 tarps $12,600

Radio 23% of budget

Source: Radios Advantage Advertising Effectiveness Study, 2006.

Key Findings
Moving just 20% of your television budget to commercial radio has been proven to increase brand awareness by 22% Total communication for Brand A in the test market of radio and free-to-air television increased. Brand presence was signicantly (22%) higher amongst those exposed to radio and television.
76% TV and radio TEST combined helps drive spontaneous communication Total communication awareness to awareness of higher levels than the brand just TV alone +22% 54%

Seen TV ad only

Seen TV and heard radio ad

Even among well known brands, moving just 20% of a television budget to commercial radio has been proven to increase brand awareness by 6% Even for iconic Brand B with a high brand awareness base, radio helped to signicantly lift brand awareness by 6% to 99% total awareness among the target audience.
99% Reaching the target audience through radio helped drive brand awareness to nearly 100% TEST Total brand awareness Seen TV ad but not regular listeners of relevant radio station/s Seen TV ad and regular listeners of relevant radio station/s 93% +6%

Even among well known brands, moving just 20% of a television budget to commercial radio has been proven to increase sales by up to 15%

Even among well known brands, moving just 20% of your television budget to commercial radio has been proven to increase brand awareness by 6%

Sales for iconic Brand B in a highly cluttered category increased by 15% in the test market with the addition of radio.
Sales index

120 115 110 105 100 95 90

TELEVISION AND RADIO TEST TELEVISION ONLY CONTROL +15% 100 100 100 115

Pre Post

Source: Radios Advantage Advertising Effectiveness Study, 2006.

What Does This Mean For Advertisers?

Better planning of media campaigns can be achieved by investing advertising dollars more effectively and without increasing total spend. The result is signicant increases in sales and awareness. FMCG Category Growth The FMCG categories of retail, food, and toiletries and cosmetics are among the largest spending categories on all advertising and have shown annual category growth in advertising spend in recent years. Radio advertising ranges from 1-8% of all expenditure across these categories of a total $2,346 million per year. This new studys results present an opportunity for radio to play a greater role among FMCG category advertising.
Source: Nielsen Media Research, AdEx, Top Advertisers Report 2004/2005.

Major International Findings

A number of radio effectiveness studies have been conducted around the world in recent years. The Australian advertising effectiveness study draws connections with the following studies: The Awareness Multiplier Study, UK Adding radio to television has a 15% multiplier effect. If 10% of a given television budget is re-deployed onto radio, the efciency of the campaign in building awareness increases on average by 15%.
Source: Radio Advertising Bureau, UK.

The Radio Sales Multiplier, UK Radio advertising creates an average sales uplift of 9%. Radio advertising creates an average sales uplift of 2.2% per 100 radio ratings.
Source: Radio Advertising Bureau, UK.

Even among well known brands, moving just 20% of a television budget to commercial radio has been proven to increase sales by up to 15%

Radios ROI Advantage, USA Radios return on investment (ROI) was 49% higher than observed for television. Radio ads increased sales even when national television is also present. Radio advertising consistently and signicantly increased product sales and delivered meaningful prot for each dollar of advertising.
Source: Radio Ad Effectiveness Lab, USA.

Media Characteristics Radio and Television

Radio and television share many common strengths: Consumed on a daily basis. Account for a high share of the average consumers media day. Real-time media effective at reaching out to new customers. Allow advertisers to decide when consumers will be exposed to their advertising messages. However, it is the differences between the two media that build on these synergies to create a highly powerful and proven multiplier effect.

Functional Media Characteristics Radio Low ad avoidance Frequency/recency of impact Reaches people when engaged in relevant activities Daytime orientation Television Product demonstration Water cooler moments Segmented programme environments Evening orientation

While television can play a valuable role in driving awareness of, and demonstrating new products, radio is effective at consolidating this contact through reiteration at relevant times and in relevant places. The combined effect of using the two media in combination is a greater ability to reach out to new customers more effectively and to speak with people in different modes, thus enhancing brand recall and relevance. Emotional Connection Characteristics Radio Personal Friendly Trusted Radio seen as a speak with medium Television Public Glamorous Exciting Television seen as a talk at medium

Radio and television communicate differently on an emotional level. While television scores highly in terms of glamour and the public nature in which it communicates (a talk at medium), radios communication is perceived as personal, friendly and trusted (a speak with medium). Media Relationships Map Radio and television complement each other with their varying relationships and connections with audiences. Radio is the most personal of all media. Radios intimacy offers the advertiser the chance to speak to the listener on a oneto-one basis and the result is a personal relationship between station and listener. This is in contrast to television, which is more of a distant medium, often consumed in a group setting where people react collectively to the content. This study proves that the complementary nature of radio and television make them effective partners. Media relationship map

Over 8.6 million people tune into commercial radio each week

Bigger than me

TV

National papers Magazines

Me

Posters

Radio

Further from me
Source: Radio Advertising Bureau, UK.

Commercial Radio and Television in Combination

Across an average day, people spend more of their time (73%) interacting with commercial radio and free-to-air television than any other media. Share of time all day##
Direct mail 1% Newspapers 5% Magazines 3 % Internet 10%

Pay TV 8%

Australians spend an average of 18 hours 49 minutes listening to commercial radio each week

Commercial television 39%

Commercial radio 34%

Radio cuts through and reaches people at relevant moments throughout the day, complementing televisions high reach during the evening. This media mix provides ample opportunity for a message to reach its audience. Commercial Radio vs Free-To-Air Television^^ 25%
Average reach (%)
21% 17% 16%

Commercial radio Free-to-air TV

15% 13% 12% 13% 15% 13%

23% 23% 22% 21%

20% 15%
12%

20%

16% 14% 11% 8% 5% 4% 4% 4% 3%

10% 5% 0%
2% 4% 4% 3% 3% 4% 5% 5% 5% 6%

7%

7%

Radio and Television Main Media of Choice Commercial radio and free-to-air television both offer high levels of reach and are main media of choice amongst most Australians. Commercial radio reaches 8.6 million people or nearly 80% of all Australians each week.** Free-to-air television reaches 11.1 million people or 99% of Australians each week.~ Commercial radio listeners tune in for over 3 hours a day## Radio is perfect for reaching the time poor consumer because it does not demand active involvement while listening. Radio and television frequency and brand building combination.
Time spent (minutes per day)

200 150 100 50

19 39 13 32 4 159 136
** Source: Nielsen Media Research, Radio Advisor, Survey #8 2005, All People 10+, MonSun 5.30am-12MN. ~ Source: Nielsen Media Research, Panorama, Survey 10 2005 (Jan-Dec 2005), All people 14+. Radio source: Nielson Media Research, Radio Advisor, Survey 1-8 2005, Mon-Sun 5.3012MN, All people 10+. TV source: OzTAM, 5 city total TV, average audience, weeks 1-48, 2005.
^^

C om m e ra rcia di l o C om m er ci TV al N ew sp ap er s

In te rn et

M ag az in es

TV

Pa y

Di re ct

m ai l

06 :0 0 07 -07 :0 :0 0 0 08 -08 :0 :0 0 0 09 -09 :0 :0 0 0 10 -10 :0 :0 0 0 11 -11 :0 :0 0- 0 12 12 :0 :0 0 0 13 -13 :0 :0 0 0 14 -14 :0 :0 0 0 15 -15 :0 :0 0 0 16 -16 :0 :0 0 0 17 -17 :0 :0 0 0 18 -18 :0 :0 0 0 19 -19 :0 :0 0 0 20 -20 :0 :0 0- 0 21 21 :0 :0 0 0 22 -22 :0 :0 0 0 23 -23 :0 :0 0- 0 24 :0 0

Source: Commercial Radio Australia, Targeting the Time Poor study, 2002 update.
##

For the full study details, additional information and downloadable charts and text, visit commercialradio.com.au

Commercial Radio Australia A.C.N. 059 731 467 A.B.N. 52 059 731 467 Level 5 88 Foveaux Street Surry Hills NSW 2010 T: 02 9281 6577 F: 02 9281 6599 E: mail@commercialradio.com.au I: www.commercialradio.com.au Copyright Commercial Radio Australia Limited 2006