Moments later you bark into your intercom: "Madge! Get something on radio advertising costs off the Internet."  And here you are.
This article will clarify how radio is priced, what you're really buying, and what you should expect for your money. 

If you have a modest budget, you can test radio for $500 to $1,000 plus a little elbow grease.  Scan this page, then click to Do It Yourself Radio.

Radio is a misunderstood and poorly sold media.  Local station reps strive valiantly to pry dollars away from local TV and Cable.  They peddle Average Quarter Hour audience numbers and tout their recent jumps in the Arbitron ratings.  They want you to buy thirteen-week schedules because, they claim, radio is a frequency media.  It's not.

Radio is a loyalty media.  The same people listen to the same two or three stations every day.  You can build awareness and sales within those narrow slices of the population without spending a ton of money on frequency. Or you can build broad awareness and sales by spreading your money judiciously and briefly among five to ten stations that reach your Target Audience.

Gross Media dollars, phone calls, unit sales, and gross revenue are hard numbers.  Radio is chock full of fuzzy numbers - statistical concepts such as "weekly cume," "AQH," "reach" and "frequency."

If you learn how to judge and manipulate the fuzzy numbers you can use radio to drive in the hard numbers.

Read on.

Radio Advertising Costs less than
TV or Newspapers.

Compared to television, magazines, and newspaper, radio does deliver Target Audiences at very low costs.

You can reach, say, Females aged 25-34 for $18.50 per thousand in local radio or for only $1.99 per thousand on Sirius/XM.  The same ladies could cost $36.00 or so per thousand in a TV :30 or $85.00 per thousand in a half-page newspaper ad.  

Understand that radio is sold by the spot (:30 or :60), but what you're really buying is ears (AKA  Gross Impressions). 

A $20 radio :60 is obviously cheaper than a $50  Cable TV :30, but the more important issue is how many people hear the radio or see the TV commercial.

When the eager young rep promised 80 GRPS (Gross Rating Points), she was selling a total number of Gross Impressions equal to 80% of the total local population of persons aged 12+ or 18+.

If she promised 80 TRPS (Target Rating Points), she'd deliver a total number of Gross Impressions equal to 80% of the local population in your Target Audience - Females 25-34 or Males 25-59, for example.

Her station would reach 1.6% of your "hot demo" at a average frequency of 3.8 each week.  Reach times Frequency times Weeks equals GRPS (or TRPS).

1.6% Reach x 3.8 Frequency x 13 weeks =
79+ GRPS.

That does NOT mean 80% of the market will hear your commercial.  Here's why:

Radio stations hone in on narrow slices of the population. They try to attract and keep loyal audiences - people who will listen to the same two or three stations every day.

If there are 1,000,000 Females aged 25-34 in the market, and the station reaches 1.6% of them, the station's F25-34 Cume (cumulative audience) is 16,000 unique individuals of that gender and age range.

Also, please understand that "reaching" your Target Audience does not guarantee that they'll listen to your commercial, or respond to it, or do anything.  Radio stations sell ears.  They do not sell Widgets. Which brings up:

The Three Fatal Fallacies of Radio.

# 1 Fallacy of Radio:  Frequency Builds Response.

Frequency builds receipts for radio reps.  All response (calls, clicks, store visits, UPC-tracked unit sales) comes from Active Shoppers.  How often an Active Shopper has to hear a commercial to respond to it is a function of the copy.  Most people decided to act, or not, after 1 to 3 exposures to a message.

The number of Active Shoppers who listen to any station this week is your Cume Quota.  That quota may refresh itself from week to week.  If so, moderate frequency can maintain steady response over time, but excess frequency is a waste of money.

# 2 Fallacy of Radio:  Cheap Spots Build Profits.

When you glanced at that Tapscan Report you noticed that most of the schedule will run at night, after 8pm.  Those spots only cost $20 or so.  What a deal!  But wait, there's less!

Those $20 spots only deliver 4,000 Target Audience Gross Impressions.  Fewer people listen to radio at night than during daylight hours.  If you buy a lot of night time, weekend, or overnight spots you'll develop your frequency among a tiny sliver of the population. Essentially you'll pound the same nails over and over again - missing most of the other people in that Cume Audience entirely.

You'll "save money", but you won't build huge awareness, or response, or profits.

# 3 Fallacy of Radio:  Powerful Announcers Build Brands.

When the rep promises "Free Production" does that mean she'll write the copy - from your Yellow Pages ad - and get the station announcer to read it?  Is that the same Powerful Announcer who reads bullet point copy for Mattress Mountain, Larry's Lawn Care, and BeBe's Bodacious BarbieQueue?  How expensive is "Free Production" if your message gets lost in the Daily Drone of Urgent Copy?

Does Free Creative really work in radio?  Mine does.  But it's not Free - well, not at first.

Radio Advertising Costs for Retailers.

Radio Advertising Costs for Direct Response.