Buyers who respond to radio ads can be high value customers, spending a median $59 per purchase compared to a median $40 per purchase for TV informercial buyers.
Marketers will have to measure the effectiveness of their own campaigns by tracking response by ad and radio station to calculate metrics such as:
- Cost per lead (phone call or click)
- Cost per order
- Revenue per order
- Return on media investment
There are no benchmarks or averages available that marketers should expect to see. Results will vary by company and campaign and on factors such as price point and lifetime value of the customer.
For example, a company in the financial services category with high price point products might generate a good ROI with lower response rates. By contrast, a company with a low price point item would need higher response and conversion rates to achieve a good return.
Even for low-price items, though, a lower conversion rate can still lead to good ROI for a campaign if the company knows it has a high lifetime value for each customer. “It really comes down to understanding your business and what you can afford to pay to acquire customers. You need to know what your profitability metrics are,” Astor says.