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RADIO TUNING IN TO DIRECT RESPONSE CELLULAR PHONES COULD HELP BOOST MEDIUM

By Published on .

When it comes to direct-response marketing, radio is basically uncharted territory.

That makes it all the more intriguing to some marketers and agencies, who are using the medium in their plans.

And radio may gain greater visability on the direct-marketing map with the proliferation of cellular phones.

While the broad view of direct marketing aims to solicit a listener's response, the narrow view is that the key to results comes with the snaring of valuable data: name, address, phone number and, sometimes, age.

The concept seems simple enough, but with the radio medium it's largely unavailable on a national level, says Charles Hamowy, a consultant to the IDS Financial Services division of American Express Co. and affiliated with Edison Direct, New York.

"With national or syndicated radio, one of the problems you have is how do you get the leads [listeners who respond by calling the phone number] distributed to a local office," he says.

However, Mr. Hamowy claims IDS has become the first company to use radio for a national direct-response push.

"We can make national radio buys and distribute the leads [to 8,000 local IDS offices] by computerized fax in a timely manner," Mr. Hamowy says.

It's possible, he says, because the Edison agency developed software that automatically faxes leads by ZIP code information obtained when a listener responds to a radio spot by calling the phone number given.

The effort now is evolving into a two-step offer, with a radio pitch for a free brochure to callers. Operators take name, address, phone number and age and offer to book the caller for a consultation at a local IDS Financial Services office.

"Forty percent of the callers are converted to requests for consultation and 50% of the request for consultations convert to a meeting. That's huge," claims Mr. Hamowy.

The second concept was tested in Cleveland and will be expanded to Dallas and Pittsburgh. Ogilvy & Mather is American Express' agency of record.

"We took advantage of narrow casting" in the core program, he notes. "For instance, we advertise on daytime financial-services shows. We first started to market to senior citizens; since then we have expanded. The people calling in were the people who had the need. It was 2.5 times more profitable than the direct-mail campaign the company was using."

Gary Fries, president-CEO of Radio Advertising Bureau, takes the direct-response idea a step further by suggesting the cellular phone can be a valuable tool for radio advertisers.

"I think all advertisers are looking for a means to communicate to American consumers and capitalize on an inpulsive action. When I saw the statistics on cellular phones, it blew my mind," Mr. Fries says.

The statistics Mr. Fries refers to come from Cellular Telecommunications Industry Association. According to the association, 17,000 Americans sign up for new cellular service each day. As of June 30, the U.S. cellular phone industry serviced 19 million people, a 3.3 million subscribership increase from January.

Portable phones account for 42.4% of all cellular phones sold in 1994; in 1993 that figure was 33.3% of all cellular phones.

Approximately 58% of those who buy cellular phones do so for non-business usage, according to a cellular phone user group survey by market researcher Economic Management Consultants International.

So far, RAB's contention that the cellular phone may deserve a lane on the information superhighway as a direct-response tool is so novel it's undeveloped.

Mark Heiden, senior VP of Eagle Marketing, Fort Collins, Colo., says radio stations would need to develop a system to track which calls are coming in from cellular phones and which calls are coming from other phones.

But Mr. Hamowy agrees the cellular phone could be a useful tool. He says his agency was surprised to discover, in an unscientific manner, that when mid-day callers in Los Angeles were asked where they were calling from, a great many of them said car phones.

Midday is not generally considered drive time.

Meanwhile, Mr. Heiden says he wouldn't consider radio a direct-marketing vehicle unless radio stations have established databases they can provide advertisers and with which they can qualify the listeners as users of a particular product.

"With the information available today from names and addresses, such as life-style, clustering, we have to be able to qualify the personal consumption habits: `Here are the people who own Chevrolets in my audience.' " says Mr. Heiden.

"There are only a handful of stations in every market that are doing it [database marketing] to the degree they could be doing it, " he adds.

One advantage radio has over magazines, according to Marc Guild, president of the marketing division of Interep Radio Store, is that radio stations are local.

"In radio, you have stations with formating that appeals to not only a certain psychographic and demographic age segment, but it is living and breathing in the same town you are in," Mr. Guild says.

Mr. Hamowy says people at different radio stations are telling him local advertisers are more interested in direct response than ever before.

Dan Rose, senior VP-director of client services at Frankel & Co., a Chicago-based marketing services agency, cautions that few mainstream ad campaigns stand on one medium alone.

"The reason more and more companies are using more radio is because it is working better and the consumers are responding better," he says. "We evaluate programs based on cost per sale, often broken out by medium or offer, or a particular combination of tactics. What you see is increased response rates.

"If you take a look at the cost of direct [marketing], your No.*1 and No. #2 media are telephone and the mail. Your cost of mail over the years has continued to go up and up. As a direct marketer is evaluating media, they don't care what media they use, they care what works. If other media are going up and not becoming more effective, radio has become a more cost-effective medium, relatively speaking, than other media in the arsenal of a direct marketer," says Mr. Rose.

"We know that direct-response radio can be used to soften the market for mailings that are going out ... [so] when my mailing hits your address you'll be inclined to respond," he adds.

That means a dual-media campaign.

"If I were in the business of selling radio, I'd sell it as part of a total direct-response" campaign, he says. "We conducted a test where we had print alone. We conducted the same offer with print and radio. Not only did radio generate responses, but it lifted the overall response to print."

Radio alone out-pulled projections by 60%, Mr. Rose says, with more than 75% of qualified respondents converting to sales on the phone.

Mr. Hamowy insists radio can be used as a primary advertising vehicle, however.

"There's so much you can do on radio it's ridiculous," he says. "It is totally measurable and accountable.... The worst mistake is to make an assumption that something doesn't work."

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