• by Jack Loechner , Staff Writer @mp_research, February 20, 2004

Accountability and ROI Are Radio's Most Important Measurements

Gary Fries, President and Chief Executive Officer of the Radio Advertising Bureau, opened his semi-annual State of the Industry speech by noting that "Advertisers need to show their stockholders an accountability of every dollar spent. Media buyers and planners are trying to accomplish this for advertisers and are challenged to show ROI. The Radio industry is not doing a good job of showing this. We have to be able to document ROI."

The Radio Advertising Bureau, with Arbitron, TargetCast TCM and Padin & Estabrook LLC reported on the study to determine the media buying community's attitudes towards broadcast and audience accountability. An underlying objective for this research was to access perceptions of radio vs. other media in terms of being an effective media vehicle. The study was conducted among "thought leaders" in the media buying community using a multi-faceted approach among:

25 senior level media decision makers

Advertisers and agencies

Buyers, planners, management

45+ minute, in-depth personal interviews

Conducted by senior media professionals

The situation encountered was an increasingly demanding marketplace where media buyers are continually being challenged to demonstrate advertising ROI, and accountability has become a critical focus - "prove" your delivery.

There is a recognized need for a more accurate understanding of what advertisers, media agencies and radio sales people believe:

How broadcast accountability is defined, and

How important are accountability issues when allocating media budgets between media

Key findings:

Radio is not any respondent's primary advertising vehicle, but all respondents had recently used radio as part of their media mixes, though receiving only a minor portion of advertising budgets

Radio is viewed as an "imperfect" medium, able to deliver numerous legitimate, important benefits for advertisers but restrained by schedule integrity, audience measurement and data timeliness

Advertisers and agencies strongly believe that it is important to know exactly when their advertising runs and all respondents conduct some level of post-buy analysis while many have formal guidelines for these accountability analyses.

Radio received poor ratings for credibility of its audience measurement and was ranked radio lower than other media.

Enhanced (commercial) ratings will increase some advertisers' spending in radio, while reducing others.

Those who use data to more effectively place ads will increase allocations, but those unwilling to take the extra analytical steps, may cut radio spending.

Find out more here.