A look inside radio

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In recent years, two forms of electronic media have grabbed headlines as b-to-b marketing vehicles. First, online advertising, with its measurement and targeting capability, was going to revolutionize b-to-b marketing—and to a degree it has, although not in line with the optimistic forecasts. Then, more recently, cable TV news networks entered the spotlight, capturing upscale viewers and the b-to-b advertisers they attract.

But amid this hubbub, radio—the oldest electronic medium—has quietly continued to draw b-to-b marketers ranging from The Wall Street Journal to Nextel Communications Inc. to United Parcel Service of America. Radio attracts these advertisers with its capability to reach a broad, upscale business audience at comparatively inexpensive rates.

"On a cost-per-point basis, television is two times radio," said Reyn Leutz, senior partner-director of national radio for WPP Group plc’s Mindshare. Leutz oversees the placement of Merrill Lynch’s radio advertising. "It’s a very efficient means to reach men, especially upscale men or upscale adults."

Alan Johnson, senior VP-director media services at Mullen, the Wenham, Mass., agency that handles the Nextel account, said: "Radio is kind of like the Chevy truck of media. It’s a real workhorse."

Tuning into shock jocks

B-to-b marketers from industries as diverse as telecommunications and financial services rely heavily on radio to communicate their marketing messages to a business audience. They generally find this audience on sports, news and talk radio programs. Occasionally, they have even used shock jocks to reach their target.

The Wall Street Journal, for instance, promoted its recent redesign on "Imus in the Morning," the nationally syndicated radio show of Don Imus, the man who helped pave the way for later shock jocks such as Howard Stern.

"There’s a man who’s reinvented himself," Leutz said of Imus, who used to cultivate controversy but has morphed into an admired political commentator and something of an elder statesmen among shock jocks.

"His listeners fit into our demographic," said Aaron Bedy, corporate communications manager for Dow Jones & Co., publisher of The Wall Street Journal. "Imus also occasionally references The Wall Street Journal in a positive light." The newspaper’s redesign also was promoted on Dow Jones’ radio network, Wall Street Journal Radio, which provides hourly business news reports to more than 180 stations.

Shock jocks, who seem preoccupied with the taboo topics of sex and race, put off many b-to-b advertisers. "A lot of clients have issues with that," Leutz said. "They just don’t know what [the shock jocks] are going to say."

Rick Radermacher, national advertising manager of Atlanta-based UPS, which has used radio as a significant part of its integrated "Brown" branding campaign, said his company has used Imus in the past.

"Imus is a bit different from Howard Stern," Radermacher said. "He’s a legitimate format, and he spans the spectrum from political dissertation to sophomoric humor. … We ran on his show locally in Atlanta a couple of years ago."

But radio is so diverse that controversy-averse corporations can find plenty of other venues for their advertisements. "We are conservative," Radermacher said. "We can find many formats that we can use to get our message across."

Many marketers have associated their brands with more buttoned-down personalities. Merrill Lynch, for instance, has run spots on "Lou Dobbs NBC Financial Report," which the CNN anchor started during his hiatus from "Moneyline" and which is syndicated by United Stations Radio Networks. The show airs on more than 900 radio stations three times a day: morning, mid-day and after the close of stock trading.

Dreyfus, OfficeMax and the U.S. Postal Service also run spots on Dobbs’ show. Mindshare’s Leutz likes the show because of its broad reach, upscale audience and reasonable cost. "In the morning drive, Lou does over a 1.0 rating, which is higher than a lot of cable," Leutz said. "These are huge numbers, at half the price of television."

Negotiated rates for "Imus" and "Dobbs" are about $3,000 for a 30-second spot, according to media strategists. The CPM for radio personalities can be double what it is for radio networks, about $6 CPM vs. $3.

Revenues rebound

Like most media, radio suffered advertising declines between 2000 and 2001. Network radio revenues, according to Taylor Nelson Sofres’ Competitive Media Reporting, fell to $833.7 million in 2001 from $952.9 million the previous year, a decline of 12.5%. National spot radio tumbled to $2.2 billion from $2.7 billion, a drop of 18.5%.

So far in 2002, network radio has bounced back, climbing from $182.3 million in last year’s first quarter to $207.7 million in first quarter 2002, a jump of 13.9%. In the same period, national spot radio also grew, from $432.2 million to $472.5 million, a gain of 9.3%.

But business and tech spending on network radio fell 21.6% to $52.0 million in the first quarter, from $66.3 million a year earlier. National spot radio fared better, with business and tech spending up 21.5% to $194.5 million, from $160.1 million in the first quarter of 2001.

Marketers that rely on radio like it for several reasons. For one thing, radio, particularly during the AM drive time, captures the hard-to-reach upper management target. "Advertisers realize that their prospects are listening from 5 or 6 in the morning until 8 or 8:30 [a.m.], and then they’re up in the air and all over the place and hard to reach," said Natalie Swed Stone, senior VP-director of national radio services for Omnicom Group’s media-buying agency OMD, New York.

During their commute, radio listeners are as captive an audience as you’ll find in media these days. "The one time when you know you may have them is in the car, given their commute," said Rick Segal, chairman of agency HSR Business to Business, Cincinnati.

A recent survey of top management conducted by Omnicom Group’s Doremus Advertising found that 68% of respondents listened to news radio, and 48% listened to National Public Radio.

Many media strategists find numbers like that very convincing. "I think in terms of reaching upscale people it’s a no-brainer," Leutz said. "Can you tell I like radio?"

Not for every marketer

But radio, even its supporters say, is not for every b-to-b product. "You’re not going to move machine tools; you’re not going to move jet aircraft engines with it," Segal said.

A general rule of thumb seems to be that radio can be used efficiently only if a marketer’s product can be used by nearly any business. Shipping, telecommunications and financial services are the kinds of b-to-b services often advertised on radio.

UPS relies heavily on sports programs to disseminate its message. The company sponsors radio broadcasts of its hometown Atlanta Braves as well as more than a dozen other major league baseball teams. It also has tailored radio spots to tie into its sponsorship of NASCAR.

When advertising to the male-dominated sports audience, UPS tends to use spots created for this demographic. For instance, a 60-second ad titled "Bowling Night," in which one man describes how UPS has simplified his job so that he is now on time for his bowling league, appears regularly on sports broadcasts and sports talk radio, Radermacher said.

Similarly, the 60-second spot "Breakfast," about a mother having more time in the morning with her daughter thanks to UPS making her job simpler, runs on music stations that attract a large audience of women.

BB&T Corp., a Winston-Salem, N.C., company that owns banks throughout the South Atlantic region, advertises on NCAA basketball broadcasts to reach its target audience of small and mid-sized businesses, said Donna Mercer, VP-media director of Howard, Merrell, & Partners, BB&T’s agency.

Ron Denny, director of advertising and public relations for BB&T, likes radio because it can touch people’s imagination. BB&T uses customer testimonials in a year-round campaign that now has about 100 different spots. "There’s the old cliché that radio is the theater of the mind," Denny said. "Some of these folks have very powerful stories to tell in their vignettes. It has so much more impact hearing it from real people than seeing it in a print ad."

BB&T does TV and print advertising, but most of its b-to-b budget goes into radio. In addition to sports, BB&T favors news and talk format shows. "We want to be around news," Mercer said. For this reason, BB&T often underwrites NPR’s "Morning Edition" on local stations.

"If you’re trying to reach as many business owners as possible, it makes a lot of strategic sense to use National Public Radio, in addition to traditional radio," Denny said. "We can’t run testimonials, but it does let people know we’re out there."

Nextel Communications is another b-to-b marketer that believes in radio. The company has used radio as a major component of its b-to-b strategy for nearly five years, said Mullen’s Johnson. The strategy is focused locally.

"Right now everything is in local radio," Johnson said, "because Nextel wants to have the flexibility to vary the offer at any given time on a market-by-market basis. A network doesn’t offer that flexibility."

Like Nextel, Cincinnati Bell uses radio to reach business people with specific offers on bonus minutes or waivers of activation fees. The current Cincinnati Bell campaign uses the tagline "We speak geek," with the message that the company understands the complexity of telecommunications.

Cincinnati Bell, whose account is handled by agency HSR Business to Business, generally backs up its radio advertisements with direct mail. The company has found the combination yields an unmatched return on investment. "I’ve paid back radio spending in as little as six months," said Debbie Vicchiarelli, Cincinnati Bell’s VP-business marketing, who is a big believer in radio. "I’ve never done that with TV."

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