The increasing prominence of digital ad platforms means it is easy to forget about radio.
But, if you’re looking for a way to reach the largest possible audience at a low cost, doing so would be a huge mistake.
A 2019 Nielsen report found that radio reaches an astonishing 92% of adults every week.
It reaches more people than TV (87%), smartphone (81%), PC (54%), TV-connected devices (52%), and tablets (46%).
Radio advertising is also affordable.
Competition from digital media, podcasts, and other forms of traditional media means radio advertising prices are being squeezed — making it possible for businesses to get a good deal when advertising on the airwaves.
This article will explore everything you need to know about radio advertising costs.
Table of Contents
- 1 How Much Does Radio Advertising Cost in the US?
- 2 How Are Radio Advertising Costs Calculated?
- 3 Radio Advertising Pricing Factors to Consider
- 4 How to Reach Your Target Audience
- 5 Advantages of Radio Advertising
- 6 Disadvantages of Radio Advertising
- 7 Radio Advertising is Powerful When Done Well
How Much Does Radio Advertising Cost in the US?
The average radio ad cost in the US varies significantly depending on the station and its reach. As a general guide, Media Dynamics found that it cost an average of around $13 to reach 1,000 adults in the US. This was lower than many other types of media.
The exact price of your ad depends on how many people it is expected to reach, alongside other factors that we’ll discuss later on.
When buying ads, you’ll buy multiple slots at once. Radio advertising packages typically start at a few hundred dollars and go into the tens of thousands for companies that want to reach a large audience over a long period.
Costs are always changing and depend on current conditions. S&P Global Market Intelligence has recorded a decrease in advertising rates in 2020 and predicted the average per-unit rate for a 30-second radio ad was set to decline by 18.2% in 2020 compared to 2019.
How Are Radio Advertising Costs Calculated?
Radio advertising costs consider two main factors:
- The number of people that typically listen to the show at the time of day you want to run your radio ad.
- The cost to reach 1,000 listeners (CPM) for that particular slot.
As an example, if you want to broadcast your ad on a show that reaches 4,000 people and has a CPM of $13, your per spot ad cost will be $52.
You’ll then have to take this figure and multiply it by the number of times your ad will be shown. If you want to play the ad twice a day for a week, your total radio ad cost will be $728.
This calculation becomes more complicated if different slots have different CPMs or listener numbers. You’ll have to take this into account when budgeting.
Many radio stations will help you create a package that suits your needs. Contact the station you want to advertise on for more information.
Factor-in the Cost of Creating Your Radio Ad
Be sure to consider the cost of creating the ad when budgeting. Like advertising costs, the price of creating your ad varies wildly depending on your needs.
Creating the ad yourself can be the cheapest option; however, in order to do so you’ll need to have the skills and equipment to record high-quality audio. If you plan to run the ad for a short period at the lowest price possible, consider this option.
Radio stations will often record the ad for you as they have the expertise and equipment to make a professional product.
The radio station will typically do this for a fair price. After all, you can’t advertise on their station if you don’t have an ad. They may even do it for free if your needs aren’t too complicated.
The most expensive option is to hire an agency to create an ad for you. This option often provides the best quality results as these agencies have access to a range of specialists. For example:
- Voice actors.
- Marketing strategists.
The agency will typically sit down with you before starting the creation process. This helps ensure you get a product you are happy with.
If you plan to spend big on ad slots, paying extra for a professional agency to get the most effective ad possible can be a good investment.
Radio Advertising Pricing Factors to Consider
There are many factors which may affect the amount you pay for your ad.
A 30-second slot on a breakfast show broadcast statewide costs significantly more than a 15-second slot on a small town’s evening show.
Here is a rundown of some of the most important radio pricing factors to consider.
The number of listeners your ad reaches has the biggest influence on the cost. The more people that are likely to hear it, the more you’ll have to pay.
Time of Day
When you run your ad will affect its price. This is mainly due to more people listening to stations at certain times. The demographic of the audience is also considered.
Length of Your Advert
Radio ads are typically sold in 30-second slots. If you want a longer ad, you’ll have to pay more. Meanwhile, a 15-second slot will cost less. You can often get discounts by buying larger packages.
The demographic of the people listening to your ad will affect the price you pay. An ad on a radio station targeting people in their 20s and 30s will have a higher cost per thousand than one targeting retirees — even if the overall reach is the same.
Competition for Spots
External factors also affect the amount you’ll pay for an ad. If many companies are fighting for a limited number of spots, expect prices to increase.
How Many Times You Broadcast Your Ad
Brands rarely broadcast an ad just once as repeat exposure can significantly increase audience awareness. Your budget should consider how often you want your ad played over a period.
Where You Broadcast Your Ad
Your location can seriously affect advertising rates. The cost per ad spot in major cities is typically more than on a local radio station in rural areas.
Type of Show
Different types of shows have different rates, even if the number of listeners is the same.
For example, it typically costs less to advertise on talk radio than other forms of radio, despite this type of programming being popular.
Wall Street Journal suggests this is because advertisers want to avoid being associated with controversial statements. If this is something you aren’t worried about, you could get a good deal by advertising during talk programming.
All these factors make radio ad pricing seem confusing. However, it does mean there is an option to suit all budgets.
A small business that needs a cheap campaign can target smaller stations at quieter times, while companies with more to spend can look for spots with a wider reach.
How to Reach Your Target Audience
While your budget is important, you still need to ensure that your target audience will hear the ad, so placing it when they will be listening and on the correct show or station is vital.
Most radio stations will have a media pack that explains more about who their audience is and provides listening figures for each show.
The best way to be sure you are reaching the right people is to contact the stations and ask for more information.
Each demographic will have unique listening patterns, reflecting when and what they tune in to.
Here is a table that shows the top types of radio that select groups in the US listened to according to this report.
|Demographic||Top Format (% Audience Share)||2nd Top Format (%)||3rd Top Format (%)|
|Teens 12-17||Pop charts (18.5)||Country (12.7)||AC (8.6)|
|Adults 18-34||Country (15.1)||Pop Charts (12.9)||AC (7.9)|
|Adults 25-54||Country (13.1)||Pop Charts (8.6)||AC (8.6)|
|Adults 18+||Country (13.2)||News/Talk (12.2)||AC (8.7)|
|Adults 18-49||Country (13.5)||Pop charts (10.6)||AC (8.4)|
|Women 18-49||Country (14.6)||Pop Charts (12.9)||AC (10.5)|
|Men 18-49||Country (12.7)||Pop Charts (8.4)||News/Talk (7.8)|
|Women 25-54||Country (14.3)||AC (11.1)||Pop Charts (10.8)|
|Men 25-54||Country (12)||News/Talk (9.8)||Classic Rock (8.4)|
Advantages of Radio Advertising
Radio Advertising is Well-Trusted
A Nielsen report found that radio ads were trusted by 60% of North Americans surveyed. This was higher than all forms of digital advertising as well as adverts on billboards.
The figure was only slightly behind TV ads, which were trusted by 63% of people, and newspaper ads, trusted by 65%.
This higher level of trust amongst consumers compared to online media could be down to the personal connection they have made with broadcast media over the years.
Radio Ads are Effective
Studies suggest that people act after hearing radio ads. One found that when an advert for a sporting event was broadcast on the radio, 27% of men turned the game on. This went up to 53% when the advert was played 90-minutes before the start time.
Return on Investment
Radio advertising has been shown to deliver a good return on investment. One studyfound that radio advertising returned $6 for every $1 invested.
Results varied quite significantly, though. Two retailers saw returns of 10x and 23x. At the other end of the spectrum, a soft drink brand and a breakfast bar brand saw just 2x returns. Nonetheless, all advertisers found positive returns.
Disadvantages of Radio Advertising
Results are Harder to Track
The effects of radio ads are much harder to track than digital advertising where every mouse click, impression, and purchase is counted.
Radio advertisers can measure sales before, during, and after campaigns, but it can be hard to prove that any increase is due to an ad.
Continually measuring sales in and around campaigns over the long term is the best way to track the effects of radio adverts.
It’s also possible to get an idea of an ad’s effectiveness by directing users to specially created URLs or providing tailored discount codes.
Less Granular Audience Profiles
Radio stations usually know the type of person who listens to their broadcasts.
But, you’ll never be able to target radio ads at the same level as you can when advertising online.
Of course, it isn’t always necessary to go to such an in-depth level. Businesses that target a general audience can thrive on the radio.
Harder to Experiment
It is harder to experiment with radio ads than digital ads. Creating a new version of an ad can be time-consuming and expensive. You also typically have to run an ad for some time to see how effective it is.
This compares to digital ads where changing the text, image, or who you target can be done in just a few clicks.
Radio Advertising is Powerful When Done Well
Radio advertising can be a cost-effective way to get your business in front of a large, targeted audience.
The key to a successful campaign is choosing the right station, show, and time slots to broadcast your ad. All of these factors will influence the price per spot and the campaign’s effectiveness.
You can then try to measure the effects of the campaign through sales or specially created online assets. The good news is that studies suggest that promoting your brand on the radio can deliver a good return on investment.
Read our guide to offline marketing to learn more about topics such as sponsorships, events, direct mail, and print advertising.
We also have plenty of marketing resources for small businesses on our blog.
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