Major New Study Reveals Audio is a Major ROI Driver

RADIO ONLINE | Monday, April 29, 2024

Cumulus Media and Westwood One

"Profit Ability 2: The New Business Case for Advertising," a new study on marketing effectiveness from measurement firms Gain Theory and Ebiquity, along with media agencies EssenceMediacom, Mindshare and Wavemaker UK, was released last week. The study reveals how advertising drives profit over time. This week's Cumulus Media | Westwood One Audio Active Group blog outlines the key findings.

• The just-released Profit Ability 2: The New Business Case for Advertising study reveals nearly 60% of advertising-profit effect occurs between fourteen weeks and two years.

• The 24%-18%-58% rule: 24% of advertising pays back in the same week. 18% of advertising-profit impact occurs between week two and week thirteen. 58% of advertising return occurs between week fourteen and two years.

• Advertising impact occurs over an extended period of time because very few people are in the market in the next three months.

• Overall, a dollar of advertising generates $5.19 of profit (all media over two-year period). In the short term, one to thirteen weeks, advertising generates $2.36 of profit.

• A dollar invested in audio (AM/FM radio, podcasts, or streaming), will generate $3.12 of profit within one to thirteen weeks. Over the entire two-year period (one week to two years), a dollar invested in audio will return a total of $6.29 of profit.

• Of ten media, audio ranks second in short-term return on investment (ROI) and third in overall ROI, beating all digital platforms.

• Audio is #3 in conversion of investment to profit generated, beating all digital platforms. Audio punches above its weight. At 1% of the media budget, audio generates 1.12% of the profits generated.

• Audio profit payoff occurs equally in the short and long term.