Cash and Per Inquiry(PI) Can Coexist on Radio
We used to preach to our clients that if you bought cash on Radio then you couldn’t run a Per Inquiry (PI) campaign. Our primary reasons were twofold: first, if you could make cash work and choose your placements why move to PI where schedules are more unpredictable and the stations have control. And second, we didn’t want our Radio station partners to feel like we were converting cash campaigns to PI because, after all, Per Inquiry’s role is to bring incremental opportunities for stations to monetize unsold inventory that disappears if not used.
But like all media channels Radio has changed a lot over the last decade. For DR advertisers, all advertising is judged based on return. If a placement has a positive ROI, they repeat the buy; if not, it’s cancelled. As Radio has changed, certain dayparts and days of the week just do not provide enough return to warrant purchasing because the audience isn’t there. Today media consumption is very spread out during certain times of the day as the Internet, TV, Radio, and Print compete for consumer attention. As a result, buys on Radio tend to be concentrated on days/dayparts where listenership achieves critical mass. In addition, while there is significant competition for the top Radio stations in each market driving up some of the advertising rates, demand for smaller, more niche stations hasn’t seen the same demand growth. Why, because the top stations have the audience size to generate the type of response DR advertisers seek. For smaller stations, even though the quality of the response is as good or better, the volume of responses isn’t high enough to keep running.
As a result, Radio has turned into a marketplace where there is healthy competition for key dayparts, on select days, on a handful of stations in each market. The rest of the inventory is a commodity and that’s were a good advertising strategy that combines remnant buys with a quality Per Inquiry campaign comes in. In this strategy, cash plays an important role allowing the DR advertiser to compete for the most responsive dayparts on the top stations at a rate that still provides adequate return. The PI component then steps in to help extend that campaign to other dayparts and smaller stations in the same market, because it locks in a fixed cost per lead, always ensuring a positive ROI. Now I must caution you here that you must pay a fair per lead rate to your station partner otherwise that component is destined to fail because it doesn’t provide an adequate level of income to the station for the inventory they provide. I can’t tell you how many campaigns I’ve turned down because the client is trying to lowball the PI rate to offset overspending in other campaigns – a recipe for failure. On the other hand, I have had incredible success working with clients who understand how to partner with the Radio stations and provide as high a rate as they can pay resulting in double digit lead growth year. Therefore, if managed correctly, cash and PI can coexist and provide great value to both DR advertisers and Radio stations offering advertisers a way to increase their spend by securing placements on more dayparts, while keeping their ROI at an acceptable level.
Target + Response