Just about every radio station I know battles with the same problem:

How much should my station budget for listener recruitment?

That would include billboards, transit, direct mail, cable TV, broadcast TV, online.

Schonfeld & Associates in the 2008 Ad to Sales Ratios study shows:

Industry

Ad Dollars as Percent of Sales

Annual Ad Growth Rate (%)

Annual Sales Growth Rate (%)

Gross Margin as Percent of Sales

Ad Dollars as Percent of Margin

Radio Broadcasting Stations

10

-12

8

52.6

19

Two points jump out from these statistics:

  1. On average, commercial radio stations spend 10% of their income on advertising

  2. With industry consolidation, the ad competition is actually less than it was a few years ago

Even in the age of industry consolidation, radio stations are competing for audience and spending a much larger portion of their income to recruit and retain listeners than most other industries.

To get your own copy of the Schonfeld Ad To Sales Ratio report, join the Radio Advertising Bureau.