With brands going into the annual planning season we wanted to share some hypotheses on how radio budgets could work harder.
Traditionally, FMCGs have flighted linear radio as one continuous burst (as opposed to week on / week off) at c.4-5 OTH per week. However, using response curves and simulations advanced retail econometric models, we were able to simulate radio ROI based on two alternative scenarios.
Working independently Entropy managed regional tests and econometric studies with 2 FMCG companies.
The tests ran on Capital and Heart and were commissioned by Global in order to help FMCG brands understand how to maximise the ROI of their radio media spend.
For Danone and Vimto, we were able to simulate a significant potential increase in ROI using:
For Danone and Vimto this resulted in a significant improvement in the ROI from radio.
Pulsing week on / week off reduced GRPs (and extra weeks as a result) the results showed an increased ROI of +71% for Danone and +69% for Vimto.
We don’t see any major reason why the same hypotheses couldn’t be extrapolated to other sectors (with the exception of highly seasonal products or new launches/ campaigns).
The project was highlighted in the radio trade body Radiocentre’s highlights of the year. It was also downloaded form our website by pretty much every major agency group in the UK as a significant new planning insight that could improve radio ROI.
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