A major study conducted by Nielsen Catalina Solutions (NCS) used cutting-edge measurement tools to link radio advertising to retail sales for the first time, proving the effectiveness of radio – or “audio,” as it’s often called today – for driving sales to brick and mortar stores.
The study, “From Airways to Aisles: Measuring Sales Impact with Single Source,” presented at the ARF RE:Think Conference in March, found that for every dollar spent on advertising, there was a sales return of $6 on average for those exposed to the ads in the prior 28-day period.
NCS arrived at these findings through the use of single-source methodology and frequent shopper data, measuring the sales impact for the specific media buys of eight CPG and two retail brands, each of which had different combinations of radio networks. This study was sponsored by Nielsen as part of an ongoing initiative to expand insight into the effectiveness of radio advertising. This work provides an early foundation for radio ad norms in the industry.
Finding #1: Radio works – though payback varies by category
On average, advertisers gained a $6 return for every ad dollar spent. All categories displayed positive payback with retailers leading, showing over 11 and 23 times the return.
Finding #2: Recency matters
The study found that radio delivered a powerful sales lift when heard within a few days of purchase. A consumer exposed to an ad within a day of purchasing increased the brand share by 9%, while messages delivered 28 days prior to purchase only increased share by 3.4%.
Finding #3: Current GRP levels for most CPG radio campaigns are often too low to show.
- For a snack brand, the radio campaign increased actual brand share by 32% and by 3.4 share points among consumers who saw the ad versus those who did not.
- However, since only 9% of the audience was exposed, the total sales lift among all purchases, including for the 91% who were not exposed, is a weighted average of only 0.3 share points higher than the expected lift without advertising.
Finding #4: African Americans and Hispanics show higher response to the ads
- In addition to measuring across categories, NCS measured the response among African American and Hispanic households for the brands with large enough sample sizes. Overall, the radio campaigns proved to have a substantially stronger impact on sales among both of these demographics than the total population
- For African Americans, the indexes range between about 150 – 240 and 140 – 185 for Hispanics. For example, the share point gain driven by radio for the soft drink category among African Americans was 7.7% or 92% higher than the 4.1% share gain among the total population, resulting in the 192 index shown below. Note that in the case of Hispanics, some of the schedules ran on Spanish-language stations, and some on general market stations.
How It Works
Portable People Meters (PPM) from Nielsen Audio uses portable devices that detect inaudible codes embedded in the audio portion of a broadcast program or commercial. The PPM tracks which stations are heard and when. That listener information is then linked to 60 million households of purchaser information in a single-source view to determine how the radio ads influence sales of products that were purchased in the listeners’ households. All matches are performed in a privacy-compliant, non-personally identified manner.
About Nielsen Catalina Solutions
Nielsen Catalina Solutions provides the most comprehensive single-source view of advertising to help consumer package goods marketers, agencies and media companies measure and improve advertising performance by precisely linking what consumers watch and what they buy.
The joint venture between Nielsen and Catalina integrates “watch” information from industry-leading Nielsen People Meter (NPM) Portable People Meter (PPM) and Nielsen Online, cable set-top-box data, and multi-media viewing data from NCS’ channel partners. The “watch” data is matched with the “buy” data from Nielsen Homescan® and nearly 60 million shopper households from Catalina. This single-source view provides the retail sales impact of TV, online, mobile, CRM, radio and print advertising.