Could radio be the key to punching through the performance plateau?

Originally published in Performance Marketing World on 18 April 2024.

Mark Barber, planning director at Radiocentre discusses the power of radio as a performance marketing tool.

Interest in radio and audio has been steadily increasing in the performance space, and new research from Radiocentre could be about to step-change this. In demonstrating the power of radio as a performance marketing tool, the study seeks to persuade brands to see radio differently and could provide a way to break through the dreaded ‘performance plateau’.

The performance plateau concept was developed by Dr Grace Kite, CEO of Magic Numbers, and Tom Roach, VP brand strategy at digital agency Jellyfish, to describe the stage in a brand’s marketing journey where pureplay performance marketing efficiencies and sales growth start to stagnate.

Increasingly endemic in marketing these days, it’s a challenge that affects big-name companies as much as SMEs and scale-ups. Brands arrive at the point where the success of their traditional mix of search, social and online display begins to level off and long-term growth is stifled.

Punching through the performance plateau

To move beyond the plateau and achieve sustainable growth, brands need to strike the right balance in their marketing mix and find a better harmony between demand generation and conversion. Too little demand generated from too small a pool of customers leads to limited long-term growth, no matter how good your performance marketing is. Conversely, too great a focus on building future demand combined with weak levels of conversion can also limit short-term sales and, in doing so, hinder brand growth and profitability.

This means looking beyond search and social to reach a wider audience, many of whom won’t be in the market to buy today but could be at some stage in the not-too-distant future. Incorporating brand-building activity and offline media such as radio can help create a larger reservoir of potential customers and generate a more reliable source of future revenue.

Radio helps brands generate and convert demand

Numerous research studies conducted over recent years highlight the significant effects caused by radio advertising in terms of both demand generation and demand conversion.

In terms of generating future demand, the evidence demonstrates how radio increases awareness (+49%), relevance (+24%) and trust (+32%) for brands, helping to boost brand salience. Radio is second only to TV in terms of delivering long-term return on investment, well ahead of that delivered by pureplay online response channels.

In terms of converting demand, radio is proven to drive purchase consideration (+18%), increase interaction with brands online (+52%) and deliver strong short-term return on investment – again well in excess of pureplay online response channels.

Yet, for many advertisers the challenges in measuring radio’s effect from a performance perspective is holding back investment in the medium. But why do marketers find it so difficult to attribute uplifts in web traffic to radio, given its proven capabilities in demand generation and conversion?

Attribution challenges: Radio’s impact

Experience suggests that there are two challenges to be overcome.

Firstly, online response attribution to offline exposure is complex compared to the relatively straightforward tracking methods of online/digital platforms.

Secondly, radio’s unique characteristic of being consumed alongside other activities means that people aren’t always immediately available to respond. When they do respond, they are also less likely to visit websites directly using web addresses, turning to other channels such as search engines because, let’s face it, it’s easier than remembering a URL.

These factors help explain why current attribution approaches struggle to accurately identify radio’s contribution to performance campaigns.

But, while capturing radio’s true online response effect is complex, it’s far from impossible – and radio advertising is too powerful a tool to discount on the basis of it being ‘too difficult to measure’.

Unveiling radio’s performance potential

To aid advertisers in light of these complexities, Radiocentre has produced the ‘Radio: The Performance Multiplier’ study, which aims to decipher radio’s true performance marketing capabilities.

Using regression modelling techniques, the research is a world-first exploration of the effect of 1.6bn multi-media impacts on 30m web sessions, sourced from a range of in-market campaigns.

The research reveals the fault lines in typical attribution techniques and demonstrates how, when its full effect is accurately captured, the medium uplifts web traffic more cost-efficiently than other demand-generation media. It also demonstrates how the efficiency of radio can augment results from pureplay digital response channels such as paid search, organic search and paid social.

For the full findings, read the landmark study Radio: The Performance Multiplier available now.