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Underspending in AM/FM Radio Hurts ROI, Says John Fix


John Fix
John Fix

Former Procter & Gamble media executive John Fix, now a media analytics consultant, is urging advertisers to take a closer look at how they evaluate the effectiveness of AM/FM radio campaigns. In a new blog post for Cumulus Media | Westwood One's Audio Active Group, Fix argues that many advertisers underspend on audio, which leads to weak returns in Media Mix Modeling (MMM) -- a critical tool used to assess advertising performance.

Fix, who helped reintroduce P&G to audio advertising and led their U.S. media mix modeling and attribution efforts, says one of the biggest pitfalls in evaluating audio's performance is the use of planned media weight rather than as-run delivery data. This "smoothing effect," he explains, masks the true sales impact of AM/FM radio by flattening out week-to-week variations.

"A singular ROI snapshot doesn't tell the whole story," Fix writes. "Response curves -- which show how ROI shifts with different investment levels -- are essential. Underspending yields low reach, limited frequency, and poor returns."

He highlights a study from MMM firm In4mation Insights showing that higher investment levels in streaming audio could have significantly improved ROI. The takeaway: low spending may falsely signal that a channel doesn't work, when in fact the investment was simply too low to drive meaningful results.

Fix advocates for what he calls an "optimization mindset" -- shifting the question from "Did AM/FM radio work?" to "Did this execution of AM/FM radio work?" With granular data, MMMs can not only determine effectiveness but also guide future strategy. Advertisers can optimize elements such as format, creative, daypart mix, and media weight to maximize return.

Fix also points to Nielsen data showing that AM/FM radio can outperform TV in reach at similar GRP levels. Still, many advertisers continue to treat radio as an afterthought. "For new or returning audio advertisers, underinvestment is common -- and so are misleading ROI results," he writes.

Finally, Fix emphasizes that the true value of Media Mix Modeling lies in its potential to fine-tune campaigns rather than judge them with one broad measure. When used correctly, MMM can transform AM/FM radio from a blunt instrument into a precision tool for driving brand performance.

Read the entire blog post here.

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