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What the Insiders Know About Radio Media Negotiation

Advertising on the radio is an excellent opportunity for large and small businesses offering almost any kind of product or service. Due to the large variety of radio options, you’re bound to find your intended audience, whether it’s on a national radio talk show or a local country station. No matter where you need your ads to be, the negotiation is an essential part of the process to ensure you are getting the best value and effectively communicating your brand’s message.

Many businesses are inexperienced with the mechanics of negotiating with radio stations and networks, and they often end up paying higher rates as a result. Rate cards give the standard pricing for a station for different times of the day. These rates are not set in stone; if you have done your homework on your audience, your budget, the ratings and other critical data, you might see 20-40% in savings on these rates. You just need to understand that the process of radio media buying is truly a negotiation.

Radio Advertising: The Basics

Radio ads are a dependable option for businesses that serve consumers in markets that have a lot of auto commuters - which is a vast and growing portion of the American landscape. Most ads tend to come from local businesses, but major retailers have more recently taken a renewed interest in radio advertising. Ads are usually designed to spread brand awareness, and they tend to include a way for the listener to act upon the information they’ve heard, either by calling a phone number, visiting a website or going to an actual store location.

The cost of radio advertising varies across different stations, geographical areas and times of the day. If you want your ad to play during the premium “drive time” hours during the mornings and afternoons, these spots will cost more. To determine the appropriate cost of an advertising spot on radio, you need to analyze key indicators such as ratings, the cost-per-point (CPP) and cost-per-thousand (CPM), and how many listeners a particular spot is expected to deliver. The terms and acronyms might seem confusing enough, but a lot of other factors affect media negotiation as well. Did we mention that everything is negotiable?

As part of negotiating an advertising deal with a station or network, they may even help you produce your audio commercial, allowing you to use their studio, production equipment and voice talent. These are hard costs that have to be factored into any campaign, and it can be very beneficial to address this during negotiations. Producing radio advertisements on your own can run several thousand dollars.

Obviously, there’s a lot that goes into the media negotiation process. Once you know what you don’t know, you’ll be able to go through the process with open eyes and get the best value possible.

A Lot of Things Affect Radio Media Negotiations

The cost of advertising on the radio is generally tied to three things: demographics, audience size and geography. Demographics such as the age of a station’s audience, the gender and their socioeconomic status can all affect how expensive that station’s ad inventory will be. Younger adults, 18-49, are a more expensive audience to advertise to than older audiences. Stations with wealthier listeners are going to cost more, too. And, certainly, the more listeners a station or program can deliver, the higher the rate they are likely to charge. Before you’re blind-sighted and need to make major adjustments to your budget, make sure you’ve considered all the factors that could increase the price.

Competition is another area where outside forces can impact the negotiation process. Outside events such as elections, sporting events or major holidays can cause rates to spike throughout the year. These can be national holidays such as Christmas or Valentine’s Day, which are relatively easy to proactively adjust your budget for. A local fall festival or a highly contested political race can be a bit harder to predict the effects of, however. Having frenzied political campaigns or major retailers with money to burn can increase competition for the same ad spots you’re trying to secure. This is very much a supply and demand marketplace, and the increased pressure on inventory will definitely force everyone to pay more. Strong negotiations and placing buys farther in advance can help mitigate potential issues of limited inventory.

Think About Listenership and Ratings

Before you walk into a media negotiation, you have to figure out who your target audience is and how you plan to reach them. It’s often tempting for people to think of radio in terms of popular shows or programs, especially if they listen to those shows themselves. Your own biases about where you think you can find your audience could make you pass up on great opportunities for your brand, though. It’s more important to consider the ratings and listenership of a station rather than relying on what you perceive as being the best spot for your ad.

While you enjoy news/talk, you may find that your ideal audience spends a lot of time listening to classic rock. Or, maybe you’ll find greater efficiency in reaching your audience by advertising during the lunch hour rather than the afternoon rush hour when you’re most often listening. Don’t be afraid to branch out. Prime time hours are the most competitive and expensive ad spots to get, and they might not be worth it. When you’re negotiating the best advertising schedule for your business, take a look at the stations and times no one else is. While they’re flocking to the overpriced rush hour time slots on the top-ranked stations, you just might find a diamond in the rough where you can more easily break through the clutter and be heard.

You’ve Got Options

Advertising and aligning your brand with a well-loved radio station that has a large crowd of loyal listeners can be a smart move for your business, but it can be an expensive proposition. However, there are often options available to reduce the cost. Even if you think you can’t afford the standard 60-second commercial spot, there are a number of different ways your brand can work with the station.

One thing to bring up during media negotiations is the option to buy shorter ad units. These can come in 30-second, 15-second, 10-second or even 5-second commercials. These shorter commercials are usually priced way below the traditional minute-long spots and allow you to buy space during prime time hours that you might not otherwise be able to afford.

If you’re feeling lucky, you can also opt for run of the station (ROS) commercials. Stations will run these ads during unfilled time slots at any point in the day, and since there’s no telling when your ad will air, ROS commercials are priced lower. If there happens to be an open spot during the premium airtimes, your ad could be played at a rate much lower than what that spot would have gone for normally. A word of caution here, though; this tactic puts full control of the timing of your spots in the hands of the station, and it is very likely that the bulk of your spots will air between midnight and 5:00AM.

You could also negotiate for advertising arrangements outside the typical commercial, too. Many businesses will sponsor on-air features such as sports, news, weather or traffic. This is a typically lower-cost way to generate some brand awareness and let listeners know you are a proud member of their community. Radio stations also have a number of sponsorship opportunities that you can take advantage of including in-person promotional events or digital streaming services on their websites. Media negotiation can include way more than just picking ad spots - don’t be afraid to work with their reps to come up with something a bit outside the box.

Look to the Future

As anybody familiar with business can tell you, you want to keep your loyal partners happy and foster enduring relationships. The same goes for radio stations. If you plan early and negotiate a long-term deal, you’ll likely receive discounts or other value propositions just for committing to purchasing ad times in advance. The longer the partnership goes on, the better the deals will get, too.

If you decide not to plan ahead and commit yourself to a six-month or twelve-month contract, you’ll be at the mercy of the market. As inventory decreases, expect the rates to increase. During busier months of the year, a station may completely sell out of inventory.

Friends Don’t Let Friends Negotiate Alone

Media negotiation is not a short-term, one-and-done process. When done well, it involves the curation of strong working relationships and a heaping helping of audience research. To make sure that you are receiving the best value, sticking to your ad budget and reaching the right consumers with your message, hire a media agency that knows their way around your media market. They’ll have already built the long-lasting relationships that are the foundation for good negotiating, and they’ll know the ins and outs of your audience demographics better than anyone.

The media stewards at The Ward Group have amassed a wealth of valuable experience over several decades of media negotiation. We’d love to help you build your next ad campaign. Our planners and buyers will work with you from start to finish to ensure you get the absolute greatest bang for your advertising buck. Start a conversation with us today, and get to know your friends in media!

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