From a marketing standpoint, Media Monitors’ recent decision to expand its ad monitoring to the top 250 markets, and to keep all older radio ads’ audio files available, mean a major improvement for AM/FM radio performance in media mix modeling.
Both enhancements “will dramatically improve the quality of AM/FM radio ad deliveries needed for media mix modeling and attribution measurement,” marketing consultant and former Procter & Gamble research executive John Fix says in Westwood One’s blog. Fix notes that the market expansion “will significantly improve the national representation of as-run radio advertising occurrences,” as it now represents 86% of U.S. AM/FM radio reach.
Keeping radio ad audio files “forever” means “ads can receive proper creative descriptions,” Fix says. “The specific brand or sub-brand being advertised can be verified. This removes a major pain point in submitting accurate radio delivery data to media mix modelers and attribution measurement firms.”
Media mix modeling — which measures the effectiveness of marketing efforts and media channels by analyzing historical data to determine which factors contribute to sales — now provides more benefits to local radio as, Fix says, “advertisers are conducting ‘always on’ media mix modeling that requires a steady flow of audience deliveries as input. Advances in AI and technology are sharply reducing the price of media mix modeling. This will expand the use of MMM to regional and local advertisers.”
When it comes to the best audio data for MMM analyses, Fix notes that planned GRP weight “is problematic. It creates a ‘smoothing effect’ which makes it difficult to correlate AM/FM radio ads with sales. The upshot? Audio gets little credit for sales.” The better approach is to provide as-run GRPs, which “show more [week-to-week] variation, which is exactly what the models need.”
A Nielsen survey conducted earlier this year shows that while AM/FM radio is perceived as having the lowest return on investment vs. other advertising media, Nielsen’s global MMM benchmarks rank it number two in ROI.
“Why do people think that nobody listens to radio anymore? Because there is a narrative that new media kills old media, so nobody bothers to look at evidence that doesn’t fit the narrative,” Deloitte Director of Research, Technology, Media & Telecommunications Duncan Stewart says.
As a result, Fix says, if you’re “looking to elevate your media plan and drive business outcomes, look no further than AM/FM radio, and make sure you provide the media mix modeler actual as-run radio audience deliveries.”