Nielsen: Radio Means Consumer Engagement

Nielsen announced Wednesday the results of a sales effect study that examined radio’s return on advertising spend in four retail categories. The four categories included department stores, home improvement stores, mass merchandisers and quick-service restaurants (QSR).

When brands invest in radio advertisement, they experience higher consumer engagement as illustrated by the study results. Depending on the category, radio exposure led to increased sales, foot traffic and dollars spent per shopper. Hispanic consumers led all categories measured in total spend and drove increased sales ranging from 9% to 49%.

Nielsen’s research revealed that radio exposure led to significant return on advertising investment for each category. Department stores saw the highest return of $17.00 to $1.00 and experienced a 10% increase in sales. Mass merchandisers saw a $16.00 to $1.00 return. Home improvement stores experienced a $10.00 to $1.00 return while the return for quick-service restaurants was $3.00 to $1.00.

“Our new sales effect study shows once again why radio is a critical element in any media campaign. It helps increase sales and delivers positive ROI, providing a powerful and reliable way for advertisers to connect with consumers and grow their brands,” said Carol Edwards, Senior Vice President, Media Analytics, Nielsen. “Reaching 93% of all U.S. adults every week and playing a leading role in consumers’ purchasing decisions, radio has the ability to positively impact campaign results.”

Data results by category: For each category, radio exposure positively affected bottom line sales and drove new, valuable shoppers.

• Department stores: Four department store brands that implemented radio campaigns experienced a 10% increase in sales. In addition, the campaign led to a 3% increase in total number of buyers and a 6% increase in dollars spent per customer. Radio exposure delivered a $17.00 return for every $1.00 spent.
• Home improvement: Two home improvement store brands that implemented radio campaigns saw a 4% increase in sales. The brands also saw an 8% increase in total number of buyers and a 2% increase in transactions. Radio exposure delivered a $10.00 return for every $1.00 spent.
• Mass merchandisers: Two mass merchandiser retailers that executed radio campaigns experienced a 1% increase in overall sales. Retailers saw a 2% increase in total number of shoppers and 2% in dollar spent per transactions. Radio exposure delivered $16.00 return for every $1.00 spent.
• Quick-service restaurants: Three quick service restaurant brands that implemented radio campaigns saw a 6% increase in sales. Quick service brands also experienced a 6% increase in consumers and a 1% increase in dollar spent per purchaser. Radio exposure delivered a $3.00 return for every $1.00 spent.

The research combined data from Nielsen’s Portable People Meter panel with Nielsen Buyer Insights credit and debit cards consumer data to measure sales driven by advertising. Study participants were separated into two groups and weighted to be identical on key characteristics including: age, gender, race, education, employment status, household size, children and buying history. The main difference between the test and controlled groups was radio exposure.

Pierre Bouvard, Chief Marketing Officer of Westwood One and Cumulus, comments: "In the past two years, Nielsen has looked at 22 brands advertising on the radio across multiple categories and the results are consistent: radio resoundingly drives consumer spending. In fact, across all of the examined categories, radio delivers an average  $8 incremental sales for every $1 spent. As marketers look for measurable ROI, Nielsen’s studies demonstrate the true value of radio to not only provide massive reach, but directly impact consumer spending.”

In his latest blog post, Bouvard highlights one of Nielsen's recent case studies looking specifically at a telecom advertiser. The results show how radio drove an incremental $14 per $1 spent.