Skip navigation

Radio still plays lucrative chain marketing tune

Reports about the decline of traditional radio as an effective advertising medium have not been greatly exaggerated. The news just hasn’t reached the restaurant industry, which still considers radio alive and kicking.

Overall radio revenue was flat in 2006 for the second year in a row, according to figures compiled by the Radio Advertising Bureau, and a number of forecasts predict revenue will be flat again or will decline this year.

Marketers spent about $22 billion on radio ads in 2006, up just slightly from the year before, as they continued to shift their consumer outreach to such new-media venues as cell phones, iPods and social-networking websites.

Restaurants also have expanded the new media they use, but they continue to rely on radio as a vital medium either to supplement TV and print buys or, in some cases, as the principal ad medium.

Cracker Barrel Old Country Store recently began airing radio ads for the first time in years. The Saladworks chain used radio ads as part of a branding campaign. CiCi’s Pizza supplemented a national TV campaign with network radio ads, and Buffalo Wild Wings began advertising on Westwood One radio to broaden the brand’s reach.

Data indicate that despite the new ways consumers have to listen to music and news, radio still hasn’t lost its ability to reach them. A study by Scarborough Research showed that radio reaches an average of 90.6 percent of adults 18 and older who eat in various restaurant categories.

The cost of airing radio spots varies by market size, ratings, daypart and other variables. Some 60-second spots in small markets cost as little as $50 to air, while the costs generally are $750 and higher in larger, urban markets. At any cost, however, it’s radio’s ability to stimulate purchase so swiftly after consumers hear the ads that makes it a valuable medium, said Tim Hackbardt, founder of the San Marcos, Calif.-based White Barn Group consulting firm and a former marketing executive with Del Taco and Taco Time.

“Radio is still the fastest-moving medium to motivate someone to purchase,” he said.

Hackbardt recently developed a radio campaign for Farmer Boys Food Inc., which has 56 restaurants in Southern California. The campaign is supporting the launch of a breakfast item called Farmer’s Go Bowls.

“Breakfast is the shortest window of opportunity to catch the consumer,” he said. “They have the least amount of time to spend on their meal because they’re on their way to work. We use radio because they’re going to be in their cars. We’re saturating morning drive across a lot of stations. The majority of [restaurant] locations are in particular regional areas where we can be efficient in buying.”

Aside from selling products, radio ads have to build the brand, Hackbardt said.

“Every ad has to be a branding ad to tell why you’re special in the market,” he said.

That’s also what Denver-based Chipotle Mexican Grill is trying to accomplish with radio ads that are more about entertaining listeners than selling burritos, said Chris Arnold, spokesman for the 500-plus-unit chain.

“Our radio spots are all 60-second songs about some element of the Chipotle experience,” he said. “Often you don’t really recognize them as ads until near the end.”

Perhaps that style is part of the ads’ appeal. On one Chicago radio station, for example, the most requested song of the week was a Chipotle commercial, Arnold said.

“What we like about radio is that it gives us an opportunity to target specific demographics and reach large populations within a given market,” he said.

Dallas-based Dickey’s Barbecue Pit, which has 68 units in 20 states and 48 other units in development, relies on radio ads in the morning to promote lunch and dinner and airs ads in the evening to spur home-meal-replacement and drive-thru sales, said marketing manager Sherry Sandifer.

“I think radio is the most viable media outlet for us,” she said. “Our reach is very strong.”

Dickey’s has been steadily increasing its radio budget because of the effect it has had on sales, Sandifer said. Systemwide sales were up nearly 25 percent for 2006.

“I feel we should increase radio [buys] and run top-of-mind branding spots as a focus for 2007, establishing that Dickey’s is an expert in barbecue,” she said. “I don’t want to pull away from that message.”

Branding spots would run during summer, when Dickey’s doesn’t need to promote specific items, she said.

Dickey’s uses a strong billboard campaign in addition to radio ads, but it won’t advertise on TV because choosing the most effective TV outlet, whether it’s cable, network, local or satellite, is too “convoluted,” Sandifer said. Airing radio spots is simpler and more cost-effective for Dickey’s, she added.

“I feel like you get a bigger bang for your buck,” Sandifer said.

Although national chains rely heavily on network TV buys, their franchisees often use radio to supplement those ads locally.

Dairy Queen franchisees who can’t afford to advertise on local TV use radio as the primary ad vehicle and have had “tremendous success in driving traffic,” said Tim Hawley, vice president of marketing communications for Edina, Minn.-based International Dairy Queen, operator or franchisor of more than 5,600 Dairy Queen restaurants worldwide.

The spots are intended strictly as sales vehicles.

“Our radio focuses on the product news each and every month to drive desire and traffic,” Hawley said.

Although marketers have a wider choice of ad media available than ever before, “I think radio will always have a place,” he said.

“The opportunity is to find the strongest integrated marketing plan that touches consumers in a lot of ways to feel that the brand is a part of their life,” Hawley said.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.