So you want to buy some local radio ads. The only problem? You don’t understand local radio advertising costs.

TL;DR (Too Long Didn’t Read) version: It’s a function of demand, number of listeners, and number of ad spots available. Basically a station in a place like Los Angeles that has a wealthy listener demographic with very few ad spots will be the most expensive, and a station in Montana with a lower income demographic with many ad spots will be the cheapest. Most spots will run between a couple hundred dollars to over $5k per week.

Many modern business owners are used to the way that Google Ads or Facebook Ads work. You simply set a budget and then you get however many impressions and clicks you can based on an auction model. The keywords, or audiences have no “inherent” costs but are basically determined by your competition. The upside here is it basically works with any budget. The downside?

You have no idea what you’re going to get until you’ve already spent the money.

See, because it’s an auction, at best, you’ll be able to get an estimate of reach or clicks based on your budget. Again this gives more flexibility, but also more uncertainty.

This however is the exact opposite of buying local audio ads from a radio station. With traditional audio broadcasting, you typically are paying up front for a fixed amount of ad runs during specific time slots across a number of days. These stations have been running for years and keep a close listener count so they’ll be able to have a very good idea of how many people specifically will listen to your ad.

The Process of Buying A Radio Ad

For those of you who have done any digital advertising this is going to be a bit of a shock. In most cases, you will need to pick up a phone, call a sales representative, have a long conversation around goals and what you’re looking for, and then negotiate a price. Seems right out of the stone age right?

In practice, you’ll be speaking with an account executive who works either for the individual station or, more likely, represents a group of stations owned by 1 company. This person is going to do everything in their power to sell you as much inventory as they can. Most of these folks are paid, at least in part, by commission, so it’s in their personal best interest to make sure you buy as much media as you can possibly afford. These account executives work off of an internal “rate sheet” which is the floor they can sell the various ad slots available at. Their job is to mark up that cost as much as possible and negotiate with you. Unfortunately for many folks this means they’re going to get taken for a bit of a ride. When you’re going to buy a radio advertisement you need to think of the interaction as being less like buying something from a grocery store and more like buying from a car dealership.

In their defense, there are many great folks that work as account executives that do have you best interests in mind and will negotiate with you to give you a fair rate. The above description is more of a “worst case scenario” rather than the norm. That said, it’s always important to be as cautious as possible when buying any sort of traditional media whether that’s radio, print, or otherwise.

How Local Radio Advertising Costs Are Determined

Local radio advertising costs are still a function of demand, they just aren’t as fluid as many programmatic digital marketplaces. Typically when setting the costs for a radio ad “spot” (as they’re commonly referred to) a station will use a proprietary combination of:

  1. The number of listeners they have
  2. The relative demand from advertisers for those listener demographics. (Perhaps advertisers are more interested in reaching 18-30 year old women than 65+ year old men)
  3. The number of ad slots they have available.

In addition they’ll look at more micro and local variables such as:

  1. The time of year. (Holidays usually are more expensive)
  2. The time of day. (drive time / normal commuting hours are typically more expensive)

With all these factors in mind they’ll calculate their “rate sheet” and then the account executives will mark up these rates to make sure the station gets a healthy profit.

At the end of the day, Most spots will run between $200+ to over $5k per week.

Creating Your Ad

To run a local radio ad you of course need a recorded advertisement to actually run in the spots that you’ve purchased. In the case of local broadcasting you typically have 3 options:

  1. Record your ad on your own and give it to the station.
  2. Pay the station to record the ad for you using their own on-air talent.
  3. The station will help you record your ad for additional charges.
  4. Sometimes the station will include the costs of making the ad as part of their package deals.

Which is the most cost-effective?

Option 1. Recording your own audio ad can be quite simple. You can use websites like Fiverr to find very cheap voice talent and producers who will do basically the entire process for you. So long as it meets your station’s content requirements and length this can be a very cheap and effective way to get the ad you want to run created for a very low cost.

What happens once the ad goes live?

This, unfortunately, is another disadvantage when it comes to traditional broadcast advertising. Once your ad goes live it typically needs to run it’s entire preset course and in many cases, you won’t be able to know if the campaign was effective or not until the very end. This is in stark contrast to someone who is used to running say Google search ads where you can turn ads on or off, experiment with different ad formats, track conversions, and have a host of other analytics to help you reach the right folks, with the right message, at the right times.

What other alternatives exist for audio advertising?

Many people aren’t aware, but you actually can buy audio ads through a digital platform like you can many other types of ads. You can not only purchase ads on places like Spotify or Pandora, but you can buy podcast ads, and in fact your local radio station ads as well. Many radio stations get a significant amount of their listeners through their websites these days and most of those ads are available to be purchased via a simple to use digital dashboard like we have here at Reverb Media. If you’re thinking of advertising via audio ads or radio ads, you should consider signing up with us today.

Have any questions? Thoughts? We would love to hear your voice in our comments below!