How Advertising on Radio Works–Radio advertisements “spots” are available when a service or business provides worthy consideration, usually cash, in exchange for the station airing their spot or mentioning them on air or selling them “airtime”.
Radio stations today generally run their advertising in sets, or clusters, which are scattered throughout the broadcasting hour. Studies show that the first or second commercial to air during a commercial break has higher recall than those airing later.
Most radio stations and advertising agencies subscribe to this paid service, because ratings are key in the broadcast industry. For a higher advertising success rate advertisers purchase radio spots based on a targeted demographic. For example, their client may want to reach women between 17 and 39 years old. The ratings enable advertisers to select a specific segment of the listening audience and purchase airtime accordingly. Ratings are also referred to as “numbers” in the business of radio. Arbitron is one of the primary providers of “Traditional” ratings data in the United States.
Radio “numbers” can show who is listening to a particular station, the most popular times of day for listeners in that group, and the percentage of the total listening audience that can be reached with a particular schedule of advertisements. The numbers also show exactly how many people are listening at each hour of the day. This allows an advertiser to select the strongest stations in the market with specificity and tells them what times of day will be the best times to run their ads.
Radio stations sell their airtime according to dayparts. Typically, a station’s daypart lineup will look something like the following: 6am-10am, 10am-3pm, 3pm-7pm, and 7pm- midnight. The spots running after midnight, from 12am-6am, are referred to as “overnights”. Though this schedule of dayparts can vary from station to station, most stations run similar daypart lineups and sell their advertisements accordingly. Drive times, or morning and evenings when people are commuting, are usually the most popular times of day and when each station has the most listeners. The “rates”, or what the station charges the advertiser, will reflect that.
Rates can also be affected by the time of year an advertiser runs. January is almost always a very slow time of year, and many stations run specials on their rates during that month. This is not the case in warm weather markets like Florida, where “snow birds” migrate and increase population. In this situation rates are usually at their highest as the population swells. During busier times of the year, stations can actually sell out of ads entirely, because, unlike the print media, radio stations only have a limited number of commercial units available per hour. While commercial levels are nowhere near as high today, with the average station running approximately nine minutes of ads per hour, peak periods can and do sell out.
Advertising rates can vary depending on the length of spot the advertisers elects to run. Typically sixty second spots are the most common, airtime in thirty, fifteen, and ten second intervals are also provided. Thirty-second ads have always been the norm, and most popular in television advertising, but radio stations just adopted this format recently.