August 2009 – Channel Crossing: Radio

Information is Power –and Profit

By Bill Sullivan

One sign of our troubled economy is the discounted remnant airtime being offered by more and more radio stations across the country. It’s no surprise that many advertisers are profiting from that low cost airtime. However, at my agency we know first-hand by the calls we’ve been getting that there are a growing number of advertisers who are confused by the reduced rates. Apparently, they have jumped at the chance to buy such inexpensive time, scheduled and run hastily developed campaigns and don’t understand why they’re not working. They haven’t been thought through–step by step–from creative to expected sales to the follow-up of leads and sales. In short, they’re not working because their campaigns are not based on a proven pay-for-performance strategy.

ELEMENTS OF THE STRATEGY
To oversimplify, the strategy is a method of obtaining something–more information about the product and product category. It is a way of thinking things over, of developing a profit-building strategy, a solid foundation on which to construct a successful campaign.

When we’re called on for help, we review and improve the client’s entire pay-for-performance strategy elements. Most have some information about their business, but not enough specifics to ensure a successful operation. Generally, these people find it fascinating when our pay-for-performance strategy reveals the costs and profits of every part of their campaign.

Start by determining the actual cost of the airtime, the cost per call, what it costs to convert a call to a lead, what’s the definition of a “lead,” what it costs to convert that lead into a sale, what’s the average sale and even what is the expected lifetime value of each customer–right on through to how effective the telemarketing staff is at picking up calls and how many callers they are converting into customers. There is still more that goes into a pay-for-performance strategy–but you get the picture.

A pay-for-performance strategy is a sure way to expand and realize your goals up front and fast. If advertisers can double or triple information about their costs, profits and losses, they can grow their business more than they ever thought possible.

As I remind readers of all my articles, to ensure successful campaigns, always work with experienced professionals with a proven track record.

Bill Sullivan is president of William Sullivan Advertising, a full-service advertising agency that specializes in DR radio. He can be reached at (973) 379-8555, or via e-mail at bill@williamsullivanadvertising.com.