Radio Advertising Costs

Radio Advertising Costs: How Much Should I Spend?

“How much should I spend on radio advertising?” “How do I know I am getting the best radio advertising rates?” “What radio stations should I advertise on?” “What are good and bad radio advertising prices?” “How many spots should I air on a radio station?”

Honestly, there is so much confusion about radio advertising floating around – I can’t blame you for asking these questions. Why is advertising on the radio so mysterious? The answer is – radio advertising is not mysterious. It just helps to know how it works.

Effective radio advertising relies on two major components – the message (the radio commercial itself), and the media (that the radio spot airs on).

The Message

Let’s look first at the radio commercial itself. Before even thinking about which radio stations to air on, or how much to spend on radio advertising rates, you must think about what you are going to say in your radio ad. For this article, I am assuming that all call centers, fulfillment, websites, etc. lead generation, and sales closing processes have been put in place by you, the advertiser. Creating a radio commercial that helps drive traffic is extremely important to the advertising process.

The advertising industry is full of voice talents, radio personalities, DJ’s and others, all claiming to create radio commercials. Be careful here. When entering the arena of radio commercial production, look for a radio advertising agency that has experience and a track record of successful ad campaigns. Anyone can create a radio ad, but not everyone can create a radio ad that pulls traffic. Some radio stations provide free radio commercials if you advertise on their station. Most of these free commercials are never based on strategy and are just one of several dozen commercials that have to be created by an overworked radio production person in a five to fifteen minute window of time. Remember, you usually get what you pay for.

The most effective radio commercials are built on a solid, proven strategy. The copy is written using time tested formulas that maximize potential response. The talent is handpicked to best connect with the end user and the production is based upon clear, quality, and easy to absorb audio.

So…what does the radio commercial production process cost? The majority of radio commercials that work best usually fall into the $500 to $1000 price range. There are always exceptions to the rule (lots of revisions to copy or audio, additional voice talents, celebrity endorsements, etc.) but this figure generally covers development of a solid strategy, copy from experienced copywriters, performance by high caliber voice talents, and the highest quality production services.

The Media

For many with questions about radio advertising rates, and radio station prices, here is where the mystery begins. I will try to simplify the mystery of radio media buying as much as we can in this small amount of space.

A good radio advertising buy focuses on a few different things:

* Finding the best radio stations in a market that match your customer’s demographics (age, gender, income level, etc.) and psychographics (interests, beliefs, hobbies, personality traits, etc.).

* Finding the dayparts that best reach your target customer. Mornings? Middays? Afternoons?

* Selecting the top radio stations that most efficiently reach the highest potential customers, the right number of times (defined as frequency), for the least amount of money

Usually, when researching radio advertising costs, many potential radio advertisers have a pretty good idea of the first two points. However, when it comes down to finding the best station (or stations) at the best price, the radio advertising process becomes a little more challenging.

Here is how to basically determine how much to spend on radio advertising costs. Within the market you want to advertise in, find the radio stations that have the best potential to reach your target customer. This is based on the formats of the radio stations. Urban Hip-hop stations will target different demographics than a News/Talk, or Soft Rock station. After selecting a group of radio stations, contact those stations to let them know you are thinking about advertising on their radio station. Ask for specific data from the radio stations called “rankers”. This is ratings data that most radio stations can provide based on specific requirements requested. From this point, you can get a good idea which stations perform the best in your target demographics.

Once you have narrowed down the radio stations to just a few that will effectively reach our target customer, request a proposal based on certain criteria – dayparts, frequency goals, etc. From these proposals, see who reaches the target audience most efficiently – using tools like Cost Per Point (ratio of spot rate to ratings percentage), Cost Per Thousand (ratio of spot rate to audience category totals), etc. If a radio station is not competitive, ask the station to resubmit a more competitive proposal. Ask about added value. Yes…it is quite time consuming…and yes it is tough to know if all of the station’s radio advertising rates are too high. You really have to know the market and the going rates. (This is where having an experienced agency is extremely beneficial!) An agency can compare proposals against historical figures to determine if radio station prices are in line with market averages…then negotiate, and help execute the purchase.

Great…but what does this cost? It depends on the size of the market you wish to advertise in as determined by Arbitron (the radio ratings services). Radio advertising rates can be as high as $800 per 60 spots in a top market like New York City, or as low as $3 per 60 spots in Kerrville, TX. How will you know what to spend?

Here’s a valuable system we have used from our history of working with radio advertising rates. The system is based on a solid branding schedule that may run one spot per day in the morning drive, one per day at midday, and one per day in the afternoon drive – Monday through to Friday, and two spots on Saturday and Sunday. That’s nineteen spots a week at sticker price. This type of schedule is good for achieving a desired frequency level (meaning the average listener to a station will hear the radio commercial a certain number of times). Under these broad assumptions, you can use the following chart as a rough guide to budgeting your radio advertising campaign.*

*Note, these are gross rates and do not include production costs or agency discounts. These are market averages for the standard radio schedule mentioned above, actual costs may vary. Does not factor in added value, ROS schedules, bonus spots, etc. Different combinations of dayparts on different stations may cost much less.

* Markets 1 -5 (ex: New York City, Los Angeles, Chicago, etc.)

Expect to pay from $4000 to $8000 per week/per station for a top performing station.

* Markets 6 – 20 (ex: Dallas/Ft.Worth, Houston, Phoenix, San Diego, etc.)

Expect to pay from $2000 to $5000 per week/per station for a top performing station.

* Markets 21 – 50 (ex: Denver, Cleveland, Kansas City, etc.)

Expect to pay from $1000 to $3000 per week/per station for a top performing station.

* Markets 51- 150 (ex: Akron, Syracuse, Baton Rouge, etc.)

Expect to pay from $800 to $2000 per week/per station for a top performing station.

* Markets 150+ (ex: Myrtle Beach SC, Green Bay, Topeka, etc.)

Expect to pay from $500 to $1500 per week/per station for a top performing station.

You may be saying, “Wow! That can be expensive”. In some cases it is! These are standards and radio advertising schedules come in all shapes and sizes. Sometimes, schedules are smaller depending on advertising goals and objectives. However, it is recommended that you are able to commit to the range of minimums.


Notice nothing has been mentioned about remnant radio advertising here at all. Remnant advertising is the practice of buying unused inventory at deep discounts. Remnant advertising success exists more in theory than in practice. However, this is not to say that there are not advertisers who are having success with remnant advertising. If, and when, remnant advertising falls into your lap, it is strongly suggested that you look into it. However, basing your entire radio ad campaign on remnant advertising may be shooting yourself in the foot. With the exception of a few times a year, most top performing radio stations do not have that much unsold inventory. Often, the largest advertisers have contracts that guarantee so many low cost/no cost spots that have to run. The reality is that if large advertisers (with the big dollar schedule) need their spots to run, or if another advertiser pays just one penny more than you did for your remnant spots – bump! You just got bumped off the air that day. You may pay for twenty spots and only get two that air. The stations will make it up to you, but what if you were counting on that advertising to drive sales. Or better yet, in the age of consolidated radio groups your remnant advertising might run on the third to the last rated station in the market. The result is NO RESULT. I am a firm believer that when it comes to radio advertising YOU TRULY DO GET WHAT YOU PAY FOR.

Now that radio advertising rates have been explained, you may ask the question, how long should I advertise? The type of radio advertising helps define the length of a campaign. Advertising for an event? We recommend shorter, more compact schedules to create buzz leading up to the event or launch. Branding a product? Often, long term schedules with a bit of breathing room work best. Maybe even flighting could work (on two weeks, off two weeks or some other length of time). Most of the time, the two things that will determine how long to run a radio advertising campaign will be advertiser goals (traffic numbers), and external factors such as sales cycles. Oh yeah, and usually budget affects the length of the campaign. It is not desired, but that’s reality.

The Total Cost

You may be thinking, “So if I want to run a spot on three top Houston radio stations, I should expect to pay $1000 for a commercial, plus $3000 per week per station…that’s $10,000 for one week’s worth of advertising!” That’s true, and may be just what it takes to reach several thousand potential targeted customers. The real question is, “How much money can you make off a few thousand potential targeted customers?” Is it more than $10,000 a week? $40,000 a month? These are questions to ask yourself, because in the world of advertising, that is pretty good traffic.

It works even better when you let a professional advertising agency reduce that cost even further. Let the agency get you a great radio advertising schedule by providing an instant discount ABOVE the negotiated lowest radio station price plus great added value.

M. Bruce Abbott is Creative Director/Partner of Radio Lounge, a radio advertising agency located in Houston Texas. Let Radio Lounge help you with all facets of strategic development, creative development, copywriting, production, media planning, media negotiation, media buying and monitoring of your radio advertising campaign.

If you are thinking about advertising on the radio, let the experienced radio advertising professionals at Radio Lounge make your campaign a success. Call us for a free consultation. No pressure, just friendly people who love to help companies succeed with their advertising on the radio.

The Elements of a Good Advertisement

Advertisements are all around us. Whether we’re watching television, driving down the freeway, flipping through a magazine, or listening to the radio, we are bombarded on every side by messages trying to get us to buy a product or service. And although there have been countless debates over whether or not advertising is effective and whether it really does influence people to purchase products, the fact is many companies will spend billions of dollars on a single advertisement in the hopes that it will increase their profits.

Good advertisements have the power to make people stop and take notice. You have to have been living under a rock not to notice the success of Geico’s caveman series or the iPod’s silhouette series of commercials and advertisements. And as a result of those advertisements, sales went up significantly for those two companies.

Advertising creates awareness of the product and can convey messages, attitudes, and emotions to entice and intrigue audiences. At least those are the desired effects of an advertisement. Needless to say, some advertisements fail miserably in their purpose.

So, what makes the difference between a successful advertisement and an unsuccessful one? It’s all in the design. Typically, larger organizations produce more effective advertisements, while newer and smaller companies are the ones that produce the duds. This is largely because bigger organizations have the money to hire professionals while smaller companies do not.

The advantage of hiring an in-house advertising developer or hiring an advertising agency is that you get the skills of people who have been trained in creating effective advertisements. Many have spent years and years going to school, studying past effective advertisements, looking at elements of design, and learning how to create their own effective advertising campaigns.

Learning how to create effective advertisements does not happen overnight, but there are a few simple rules that many workers for professional advertising agencies follow to create effective advertisements that will appeal to audiences and hopefully increase the company’s revenue. The following paragraphs list a few advertising principles that companies and advertisers follow when creating their own advertising campaigns.

Perhaps the most important quality of an advertisement is its uniqueness. In a world where people often see hundreds of advertisements a day, an advertisement must be unique and different in order to capture audiences’ attention. Going back to the iPod example, the single block of color with an image of a black silhouette was extremely effective at the time because it was unlike anything else around it. The simplicity of the advertisement stood out against posters and billboards that had busier images and much more text. Also, the use of bright, bold colors made people stop and look at the image. Even though the advertisement had little text on it, people got the message that this product was new, fun, and bold.

Of course, there are a variety of ways to make your advertisement stand out. Look around your area and write down descriptions of advertisements you see. What are the trends? Are they text heavy? Do they use similar colors? What kinds of images are on the advertisements? Once you start noticing trends, try to think of ways your advertisement can go against those trends and be something different–something that will make people stop and look.

One word of caution: Once you’ve made people stop and look at your advertisement, they need to be able to understand what you’re selling. You may have the most eye-catching image on your advertisement, but if it is completely unrelated to your product or service, then viewers won’t understand what you want them to buy. So, be sure that when you are selecting your images and text for your advertisement, people will understand what you’re trying to sell.

A well-designed advertisement will also communicate well to audiences. In order to figure out how to make your advertisement effective, you need to identify your audience. Who are you trying to target? Teenagers? The Elderly? Business people? Parents? There are a variety of different audiences, and the more specifically you can identify the audience for your product, the better chance you have of designing an ad that will effectively influence your audience.

For instance, if your audience consists of young teenage girls, you might choose to use bright and bold colors, but for business people you may want to create an advertisement that uses more professional blues and blacks (but don’t be afraid to be a little bolder if you’re trying to stand out).

The key is to think of the general traits of your specific audience and try to reflect those traits in your advertisement. What do they value? What do they fear? What motivates them? Once you’ve answered those questions, it should be easier to come up with a few solid ideas for an advertising campaign.

Once you’ve developed some ideas for an eye-catching advertisement and identified how you want to communicate with your specific audience, some good, solid design principles need to come into play. The advertisement needs to be legible. Viewers shouldn’t have to work to get what you’re trying to say. The advertisement needs balance. One side shouldn’t feel heavier than the other. The advertisement should also make good use of contrast, repetition, color, and pattern. When these design elements are implemented well into an advertisement, the result is a fabulous ad that will appeal aesthetically to viewers.

The above is just a brief overview of what advertisers have to think about when designing an ad. You can see why many people find it helpful to hire an advertising agency to help them develop ideas and create effective advertisements. And whether you’re looking for a Seattle or a Miami advertising agency, you shouldn’t have a problem finding an organization in your area to help you create the perfect advertisement campaign for your company.

So, if you’re thinking of creating a new ad or ad campaign for your company, by following the above guidelines and suggestions, you can create the most effect advertisements as possible, convey the message you want to convey, and be one your way to increasing revenue.