DR RADIO 101. The Secrets to Success in DR Radio. Mark Lipsky, CEO - Radio Direct Response TODAY S TOPICS

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1 1 DR RADIO 101 Mark Lipsky, CEO - Radio Direct Response TODAY S TOPICS The Secrets to Success in DR Radio Why Radio? Radio Formats Determining if a Product is Right for Radio 10 Dominos That Must Fall for You to Profit on Radio Creative Building the Perfect Radio Commercial Media Where? When? How Much? Testing, Ramping Up & Rolling Out Q & A

2 2 Why Radio? The average radio listener listens 19:30 per week HOURS : MINS SOURCE: Arbitron Ratings Company, 2006 RADIO IS SELECTIVE Teens Rhythmic CHR, Pop CHR, Urban Contemporary Rhythmic CHR, Pop CHR, Urban Contemporary Mexican Regional, Active Rock, Alternative Classic Rock, AOR, Contemporary Christian Oldies, Jazz, Classic Rock Oldies, Jazz, Classical 65+ Classical, News/Talk, Talk/Personality SOURCE: Arbitron Ratings Company, 2006 RADIO IS MOBILE Radio Reaches Consumers Everywhere!! In Car 44.7% At home 36.1% At work/other 19.2% SOURCE: Arbitron Ratings Company, June 2005

Fact Book, 2006 RADIO IS COST-EFFECTIVE Cost

3 3 RADIO IS INTRUSIVE Radio reaches. 94% of all consumers EVERY WEEK 73% of all consumers EVERY DAY SOURCE: Radio Advertising Bureau, Radio Marketing Guide & Fact Book, 2006 RADIO IS COST-EFFECTIVE Cost Efficiency Low CPM Very Little Waste Quick Creative Change Tremendous ROI RADIO IS INTIMATE Powerful Personalities NATIONAL Rush Limbaugh Dr. Laura Jim Rome

4 4 Persons Seasonal Listening SP 04 Hrs:Min SU 04 Hrs:Min FA 04 Hrs:Min WI 05 Hrs:Min SP 05 Hrs:Min :45 19:30 19:30 19:30 19:30 Teens :30 14:00 13:00 13:00 13:15 Adults :30 20:15 20:15 20:15 20:15 19:30 19:15 19:15 19:00 19:30 20:45 20:30 20:30 20:30 20:45 21:00 20:45 20:45 20:45 20:45 20:15 20:15 19:45 20:30 20:00 SOURCE: Radio Advertising Bureau, Radio Marketing Guide & Fact Book, 2006 Insider Tip Radio reaches 63% of year-old consumers within one hour of making their largest purchase of the day. SOURCE: Radio Advertising Bureau, Radio Marketing Guide & Fact Book, RADIO FORMATS America s Most Listened to Radio Formats 12+ Country 12.5% News/Talk 10.4% AC 7.1% Pop/CHR 5.5% Classic Rock 4.9% Rhythmic CHR 4.4% Oldies 4.1% Hot AC 3.6% Urban AC 3.2% Mexican Regional 2.8% Alternative 2.4% Active Rock 2.3% Urban 4.3% Christian 2.3% SOURCE: Arbitron Ratings Company, 2006

5 5 Insider Tip Foreground Formats Background Formats SPOKEN WORD News Talk Sports Religion Business MUSIC Rock AC Urban Jazz Oldies Active Listening Passive Hearing Is Your Product Right for Radio? Target Price Point: $100+ Depending upon the offer, a typical lead will cost $25-$40 to generate. A good call center will close 20%-25% of all radio leads. If your product or service is priced less than $100, it is unlikely that radio will deliver a profitable cost-per-acquisition (cost-per-order). Is Your Product Right for Radio? Product Can Be Explained It Doesn t Need to be Demonstrated If the product can make the buyer smarter, healthier, sexier, wealthier, happier, feel younger or energized, it s probably a good fit for radio. If the product needs to be visually demonstrated (a fitness machine, before and after cosmetic products) it is unlikely that a DR radio campaign will be profitable.

6 RADIO S DIRECT RESPONSE DOMINOS ADVERTISING AGENCY CALL CENTER FULFILLMENT & PRODUCT ADVERTISING AGENCY Creative Grabber Strongest Consumer

6 6 RADIO S DIRECT RESPONSE DOMINOS ADVERTISING AGENCY CALL CENTER FULFILLMENT & PRODUCT ADVERTISING AGENCY Creative Grabber Strongest Consumer Benefit Compelling Offer Urgent Call To Action ADVERTISING AGENCY Media The right stations/networks The right schedule The right price Measure and manage

7 7 CALL CENTER Phone Numbers Simple Repeaters Pneumonic 800 vs. 888 vs. 877 vs. 866 CALL CENTER Staffing Minimize abandon rate Coordinate with media buyers Plan for spikes Queue plan CALL CENTER Qualified Agents Advance training Salespeople not order-takers Incentives Monitor and manage

8 8 CALL CENTER Average Sale Maximize minimum sale Upsells and cross-sells Back end and continuity Rush shipping and add-ons FULFILLMENT & PRODUCT Method of Payment Offer multiple payment options Credit cards Check by phone Installment payments Hope the customer can pay! FULFILLMENT & PRODUCT Shipping Timely shipping system The customer must receive the merchandise for you to keep the sales revenue

9 9 FULFILLMENT & PRODUCT Returns Minimize returns Quality of Product Deliver on the Promise FULFILLMENT & PRODUCT The Back End Renewal Orders Continuity Programs Cross Sells Related Products & Services Building the Perfect Radio Commercial How does Direct Response Radio differ from Branding Radio? Direct Response Radio asks for an action NOW with a compelling call to action and a sense of urgency. Branding Radio builds image, but often at the expense of failing to generate results.

10 10 Building the Perfect Radio Commercial 1. Get Results! 2. If it doesn t get in the way of getting results - be creative if it can help you get better results. Building the Perfect Radio Commercial CONSUMER The consumer will make a phone call. The consumer will visit a Web site. The consumer will buy at retail. METRICS CPL / CPA / CPO targets defined. Systems in place to accurately measure. Building the Perfect Radio Commercial Attention-Getting Grabber Strongest Consumer Benefit Compelling Offer Urgent Call to Action

11 11 Building the Perfect Radio Commercial SPOT LENGTHS :10 :15 :30 :60 1:30 2:00 25:00 News, Weather, Traffic Sponsorships Program Sponsorships National Standard, Some Local Local Standard, Some National Rare Local Rare Local Local Radio Infomercial Building the Perfect Radio Commercial Typical Production Costs $5,000 - $15,000 Scripting, voice talent, music, sound effects, studio time, editing time, tape masters, dubs, trafficking to stations and networks. Buying Options Cash Remnant Per Inquiry An ad schedule is placed for cash A cash schedule is placed at discounted rates Ads are played in return for a piece of the action Aggressively negotiated DR rates Schedule is firm and locked Replicated week after week Last minute Fire Sale rates Schedule can be bumped for higher rates Cannot be replicated with certainty Media cost based on performance model Ads generally bumped for any paying client Schedules vary wildly, week to week Leverage added value exposure Discounted rate IS the added value Impossible to build a campaign

12 12 Scheduling The Broadcast Week MON TUE WED THU FRI SAT SUN MID-1A 1A-2A 2A-3A 3A-4A OVERNIGHTS 4A-5A 5A-6A 6A-7A 7A-8A 8A-9A 9A-10A 10A-11A 11A-NOON NOON-1P 1P-2P 2P-3P 3P-4P 4P-5P 5P-6P 6P-7P 7P-8P 8P-9P 9P-10P 10P-11P 11P-MID AM DRIVE MIDDAYS PM DRIVE EVENINGS WEEKEND PRIME Scheduling ROS 6AM-Mid (Run of Station) MON TUE WED THU FRI SAT SUN MID-1A 1A-2A 2A-3A 3A-4A 12x/ week 4A-5A 5A-6A 6A-7A 7A-8A 8A-9A 9A-10A 10A-11A 11A-NOON NOON-1P 1P-2P 2P-3P 3P-4P 4P-5P 5P-6P 6P-7P 7P-8P 8P-9P 9P-10P 10P-11P 11P-MID Scheduling Horizontal Frequency MON TUE WED THU FRI SAT SUN MID-1A 1A-2A 2A-3A 3A-4A 12x/ week 4A-5A 5A-6A 6A-7A 7A-8A 8A-9A 9A-10A 10A-11A 11A-NOON NOON-1P 1P-2P 2P-3P 3P-4P 4P-5P 5P-6P 6P-7P 7P-8P 8P-9P 9P-10P 10P-11P 11P-MID

13 13 Scheduling Vertical Frequency MON TUE WED THU FRI SAT SUN MID-1A 1A-2A 2A-3A 3A-4A 12x/ week 4A-5A 5A-6A 6A-7A 7A-8A 8A-9A 9A-10A 10A-11A 11A-NOON NOON-1P 1P-2P 2P-3P 3P-4P 4P-5P 5P-6P 6P-7P 7P-8P 8P-9P 9P-10P 10P-11P 11P-MID Buying Options A Simple Sample Test Scheduling Control Your Variables MEDIA COPY Creative # 1 Creative # 2 Live Reads ABC Prime Wks 3-4 Premiere Emerald Wks 3-4 The Max Smith Show Wks 3-4 What We Learned Creative #2 works better than Creative #1 Live Reads will be hit-or-miss

14 14 Scheduling Control Your Variables COPY Live Reads MEDIA Creative # 1 Creative # 2 ABC Prime Wks 3-4 Premiere Emerald Wks 3-4 The Max Smith Show Wks 3-4 Even if 8 out of 9 test variables fail, it only takes ONE successful combination to build a successful rollout. This is why a healthy test budget buys you more chances for success. Scheduling Control Your Variables COPY Live Reads MEDIA Creative # 1 Creative # 2 ABC Prime Wks 3-4 Premiere Emerald Wks 3-4 The Max Smith Show Wks 3-4 Even ALL 9 fail, you can still scale a profitable campaign, starting the very next day. Insider Tip Turning a Failed Campaign into a Winner Target Lead Cost $ Actual Lead Cost - $ Actual Spot Cost $ 3, Target Lead Cost - $ 1, DR Rates Accountability

15 15 DR Radio 101 Q & A Mark Lipsky, President/CEO Radio Direct Response (610) x108 mark@radiodirect.com

DATA-DRIVEN. AUDIENCES. BROADCAST RADIO?!

DATA-DRIVEN. AUDIENCES. BROADCAST RADIO?! AGENDA 1 AUDIO Best Practices 2 Data Driven Audiences 3 Strategy & Execution AUDIO IS EXPLODING are the top selling #1Headphones electronics item SMART SPEAKERS