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Radios Advantage

Advertising Effectiveness Study


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IntroductionRadio and television are a powerful and commonly used media combination.

This study sets out to explore the multiplier effect of a strategy of radio andtelevision in combination over television activity alone across two FMCG clients.

In an increasingly cluttered advertising environment and within highly competitivecategories such as FMCG, it has become more important for advertisers to cut

through and make an immediate impact on audiences. This means exploringmedia combinations that generate the greatest synergies and engage consumerswhen they are most responsive.

This study shows just how effective a commercial radio and free-to-air televisioncombination is in driving sales and awareness.

Commercial Radio OverviewA high reach medium Commercial radio reaches around 80% of Australians,who each spend on average 2 hours 41 minutes listening each day.*

Commercial radio audience is growing In 2005, over 8.6 million tuned in tocommercial radio each week, an increase of 1% over the previous year.#

Radio cuts through Time Spent Listening (TSL) research shows that peopleare listening longer to radio than they did 5 years ago. TSL in 2005 was 18 hours42 minutes compared to 18 hours 33 minutes in 2000, an increase of 9 minuteseach week.^

Breakfast listening at a high On average, 6.7 million people tuned intometropolitan commercial radio during breakfast in 2005, up from 6.6 million in 2004.#During the most recent survey period, commercial radio attracted 6.8 millionlisteners 319,000 more than the same period in 2004 and the highest number ofbreakfast listeners since at least the year 2000.^**

Commercial Radioreaches around

80% of Australianseach week

*Source: Nielsen Media Research, Radio Advisor, average of five capital cities, Survey #1-8 2005, All People

10+ unless otherwise stated.

**Source: Nielsen Media Research, Radio Advisor, average of five capital cities, Survey #8, 2005, All People10+ unless otherwise stated.

^ Source: Nielsen Media Research, Radio Advisor, average of five capital cities, Survey #1-8, 2000-2005.

# Source: Nielsen Media Research, Radio Advisor, average of five capital cities, Survey #1-8 2004 vs. 2005,All People 10+ unless otherwise stated.

^^ Source: Nielsen Media Research, Panorama Survey 10 2005 (Jan-Dec 2005), All People 14+ unlessotherwise stated.

Work 25%Elsewhere 2%

Home 47% Car 26%

Commercial radio place of listening*

Radio reaches grocery buyers while they shop Commercial radio reaches

a large proportion of grocery buyers across the day, when they are most likely tovisit a supermarket, delivering messages close to the time of purchase.

The majority of grocery buyers shop on weekdays during the morning andafternoon.

Commercial radio reaches over 40% of grocery buyers during this time.

Additionally, commercial radio reaches 65% of grocery buyers just before theyvisit the supermarket in breakfast.^^


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Executive SummaryCommercial Radio Australia commissioned Millward Brown to study theeffectiveness of radio advertising in contributing to an overall media mix,specifically the combination of commercial radio and free-to-air television.

The study involved a test and control market. The test market consisted offree-to-air television and commercial radio activity (80% television, 20% radio)and the control market free-to-air television only (100% television). This alloweda better understanding of the impact that a strategy combining both television andradio activity has over television activity alone.

Using a structured online questionnaire, pre and post interviews trackedawareness and attitudes for the brands involved.

Pre and post product sales data was analysed to determine the effect of theadvertising campaign.

Key findings into the impact of this advertising activity for two brands in the FMCGcategory were explored:

Brand A is a niche brand in the broader personal hygiene category.

Brand B is a large iconic brand in the breakfast cereal category.

Research was conducted between May and July 2005.

Respondents were aged 18 - 54yrs and were main grocery buyers who hadlistened to the radio in the past 7 days.

The media investment, as tabled below, would not be considered a large or heavycampaign.

Moving just 20%of your televisionbudget tocommercial radio

has been provento increase brandawareness by 22%

Average radio as a proportion of total budget: 20%

Brand A:

Personalhygiene

Brand B:

Breakfastcereal

Radio

17% ofbudget

Radio

23% ofbudget

CONTROL TEST

$36,220230 tarps

$30,000285 tarps

$14,420

$12,600

$40,000225 tarps

$69,388250 tarps

Source: Radios Advantage Advertising Effectiveness Study, 2006.

Headline Findings

Moving just 20% of your television budget to

commercial radio has been proven to increase

brand awareness by 22%

Even among well known brands, moving just 20%

of a television budget to commercial radio has

been proven to increase brand awareness by 6%

Even among well known brands, moving just

20% of a television budget to commercial radio

has been proven to increase sales by up to 15%


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Even among well known brands, moving just 20% of a television budget to

commercial radio has been proven to increase sales by up to 15%

Sales for iconic Brand B in a highly cluttered category increased by 15% in the testmarket with the addition of radio.

Even among well known brands, moving just 20% of a television budget to

commercial radio has been proven to increase brand awareness by 6%Even for iconic Brand B with a high brand awareness base, radio helped tosignificantly lift brand awareness by 6% to 99% total awareness among thetarget audience.

Seen TV ad but notregular listeners ofrelevant radio station/s

Seen TV ad andregular listeners ofrelevant radio station/s

Total brandawareness

93%

99%

Reaching the targetaudience throughradio helped drivebrand awareness tonearly 100%

+6%

120

115110

105

100

95

90

Salesindex

Pre

Post

100

115

100 100

TELEVISIONAND RADIO

TEST

TELEVISION ONLY

CONTROL

Even among wellknown brands,

moving just 20%

of your televisionbudget to

commercial radiohas been proven

to increase brandawareness by 6%

TEST

Source: Radios Advantage Advertising Effectiveness Study, 2006.

Key Findings

Moving just 20% of your television budget to commercial radio has been

proven to increase brand awareness by 22%

Total communication for Brand A in the test market of radio and free-to-airtelevision increased. Brand presence was significantly (22%) higher amongstthose exposed to radio and television.

Seen TV ad only Seen TV andheard radio ad

Total communicationawareness of

the brand

TEST54%

TV and radiocombined helpsdrive spontaneouscommunicationawareness tohigher levels thanjust TV alone

+22%

76%

+15%


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What Does This Mean For Advertisers?Better planning of media campaigns can be achieved by investing advertisingdollars more effectively and without increasing total spend. The result is significantincreases in sales and awareness.

FMCG Category Growth

The FMCG categories of retail, food, and toiletries and cosmetics are among the

largest spending categories on all advertising and have shown annual categorygrowth in advertising spend in recent years.

Radio advertising ranges from 1-8% of all expenditure across these categories of atotal $2,346 million per year.

This new studys results present an opportunity for radio to play a greater roleamong FMCG category advertising.

Source: Nielsen Media Research, AdEx, Top Advertisers Report 2004/2005.

Major International FindingsA number of radio effectiveness studies have been conducted around the worldin recent years. The Australian advertising effectiveness study draws connections

with the following studies:

The Awareness Multiplier Study, UK

Adding radio to television has a 15% multiplier effect.

If 10% of a given television budget is re-deployed onto radio, the efficiency

of the campaign in building awareness increases on average by 15%.

Source: Radio Advertising Bureau, UK.

The Radio Sales Multiplier, UK

Radio advertising creates an average sales uplift of 9%.

Radio advertising creates an average sales uplift of 2.2% per 100 radio

ratings.


Radios ROI Advantage, USA

Radios return on investment (ROI) was 49% higher than observed for

television.

Radio ads increased sales even when national television is also present.

Radio advertising consistently and significantly increased product sales

and delivered meaningful profit for each dollar of advertising.

Source: Radio Ad Effectiveness Lab, USA.

Media Characteristics

Radio and TelevisionRadio and television share many common strengths:

Consumed on a daily basis.

Account for a high share of the average consumers media day.

Real-time media effective at reaching out to new customers.

Allow advertisers to decide when consumers will be exposed to their

advertising messages.

However, it is the differences between the two media that build on these synergiesto create a highly powerful and proven multiplier effect.

Even among wellknown brands,moving just 20% ofa television budgetto commercialradio has beenproven to increase

sales by up to 15%


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Functional Media Characteristics

Radio Television

Low ad avoidance Product demonstration

Frequency/recency of impact Water cooler moments

Reaches people when engaged inrelevant activities

Segmented programmeenvironments

Daytime orientation Evening orientation

While television can play a valuable role in driving awareness of, anddemonstrating new products, radio is effective at consolidating this contactthrough reiteration at relevant times and in relevant places.

The combined effect of using the two media in combination is a greater ability toreach out to new customers more effectively and to speak with people in differentmodes, thus enhancing brand recall and relevance.

Emotional Connection Characteristics

Radio Television

Personal Public

Friendly Glamorous

Trusted Exciting

Radio seen as a speak with medium Television seen as a talk at medium

Radio and television communicate differently on an emotional level.

While television scores highly in terms of glamour and the public nature in whichit communicates (a talk at medium), radios communication is perceived aspersonal, friendly and trusted (a speak with medium).

Media Relationships Map

Radio and television complement each other with their varying relationships andconnections with audiences.

Radio is the most personal of all media.

Radios intimacy offers the advertiser the chance to speak to the listener on a one-to-one basis and the result is a personal relationship between station and listener.

This is in contrast to television, which is more of a distant medium, oftenconsumed in a group setting where people react collectively to the content.

This study proves that the complementary nature of radio and television makethem effective partners.

Media relationship map

Magazines

Nationalpapers

TV

Posters

Further from me

Bigger than me

RadioMe

Over 8.6 millionpeople tune into

commercialradio each week



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Australiansspend an averageof 18 hours 49

minutes listeningto commercialradio each week

Radio and Television Main Media of Choice

Commercial radio and free-to-air television both offer high levels of reach and aremain media of choice amongst most Australians.

Commercial radio reaches 8.6 million people or nearly 80% of all

Australians each week.**

Free-to-air television reaches 11.1 million people or 99% of Australians

each week.~

Commercial radio listeners tune in for over 3 hours a day##

Radio is perfect for reaching the time poor consumer because it does not

demand active involvement while listening.

Radio and television frequency and brand building combination.

Radio cuts through and reaches people at relevant moments throughout the day,complementing televisions high reach during the evening. This media mix provides

ample opportunity for a message to reach its audience.

Pay TV 8%

Direct mail 1%

Newspapers 5%

Magazines 3 %

Internet 10%

Commercialradio 34%Commercial

television 39%

Share of time all day##

200

150

100

50Timespen

t(minutesperday)

136

159

1939

13

32

4

CommercialTV

Commercial

radio

News

papers

Internet

Magazine

s

PayTV

Direct

mail

** Source: Nielsen Media Research, RadioAdvisor, Survey #8 2005, All People 10+, Mon-Sun 5.30am-12MN.

~ Source: Nielsen Media Research, Panorama,Survey 10 2005 (Jan-Dec 2005), All people 14+.

^^ Radio source: Nielson Media Research, RadioAdvisor, Survey 1-8 2005, Mon-Sun 5.30-12MN, All people 10+. TV source: OzTAM, 5city total TV, average audience, weeks 1-48,2005.

## Source: Commercial Radio Australia,Targeting the Time Poor study, 2002 update.

Commercial Radio andTelevision in Combination

Across an average day, people spend more of their time (73%) interactingwith commercial radio and free-to-air television than any other media.

0%

5%

10%

15%

20%

25%

12%

20%21%

17%16%

15%

13%12%

13%

15%

13%

11%

7%

5%4% 4% 4%

3%2%

4% 4%3% 3%

4%5% 5% 5%

6%

14%

22% 21%

23% 23%

16%

8%7%

Averagereach(%)

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Commercial radio

Free-to-air TV

Commercial Radio vs Free-To-Air Television^^


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Commercial Radio Australia

A.C.N. 059 731 467 A.B.N. 52 059 731 467Level 588 Foveaux StreetSurry HillsNSW 2010

T: 02 9281 6577F: 02 9281 6599E: [email protected]: www.commercialradio.com.au

Copyright Commercial Radio Australia Limited 2006

For the full study details, additional information and downloadablecharts and text, visit commercialradio.com.au

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