Unlocking the Potential of Radio in MMM

By Dave Hohman

In today’s complex media landscape, marketers are constantly seeking ways to optimize their media strategies and understand which channels are driving return on investment (ROI). Generally, television, digital, and social media receive the lion’s share of attention (and spend). Many marketers believe that audio, including radio, is difficult to measure in Marketing Mix Models (MMM) because of its relatively lower spend. Nielsen MMM captures and reports audio. In analyzing thousands of campaigns we can confirm that when sufficient impressions are run, audio is measurable, and shows up quite well in MMM; of course as with any tactic, some brands/categories perform stronger than others.

For guidance on how best to have any media type represented, Nielsen suggests looking at the size of the budget, the quality of the inputs and the granularity of the outlet. Example: for audio, this would include considering radio, streaming audio, and podcasts.

For guidance on how best to have any media type represented, Nielsen suggests looking at the size of the budget, the quality of the inputs and the granularity of the outlet. Example: for audio, this would include considering radio, streaming audio, and podcasts.

Here are some best practices to consider for your audio channels—radio, streaming audio, and podcasting:

• Plan for Adequate GRPs: Allocate sufficient budget to radio and other audio channels. While the appropriate levels may vary by category
• Use As-Run Data, Not Planned GRPs: Many marketers rely on planned GRPs, which can differ significantly from what is actually delivered. By using As-Run GRPs—actual media delivery—you’ll get a more accurate read of radio’s performance. Nielsen’s data consistently shows the importance of this distinction.
• DMA-Level Delivery Matters: Radio’s effectiveness can vary across different markets, so it’s important to evaluate media delivery at the Designated Market Area (DMA) level. Actual delivery often deviates from planned delivery, and understanding these variations can provide valuable insights for optimizing your radio campaigns.
• Analyze by Week: Timing is everything, especially for media like radio that may have seasonality or other timing-related nuances. Analyzing media delivery on a weekly basis—taking into account sales events, weather conditions, or special promotions—can help explain spikes or dips in performance. This granular level of analysis is crucial for understanding the true impact of your radio investments.

In our analysis1, when the relative weight of impressions is large enough to be measured, radio consistently ranks as a top-tier medium for ROI. Streaming audio also performs well, albeit behind broadcast radio. While measurable, investments in podcasting have been less common and performance is not yet indicative of streaming audio.

At Nielsen, we are committed to helping marketers make data-driven decisions that maximize the effectiveness of all of their media investments. With our proprietary models and extensive database of media performance, we can ensure that your media, including audio channels, are accurately represented and contribute to your overall marketing success.

For more information on how to optimize your Marketing Mix Model and measure the impact of radio and other audio channels, reach out to the Nielsen team today. Let’s set the record straight—radio is measurable, and when done right, it delivers.

Methodology:

Based on an analysis across 2,857 national, local and international campaigns across advertiser categories where the allocation to radio averaged a notable percentage of the total media budget.