Radio advertisement facts for kids

Radio advertising in the United States is how businesses tell people about their products or services using radio stations. These ads are usually short messages, often less than a minute long, called "spot commercials." Sometimes, there are longer ads, like "infomercials," which give more details about a product or service. Businesses pay radio stations to play these ads, which helps the stations earn money. The Federal Communications Commission (FCC) is a government group that makes rules for radio and TV, including how ads are broadcast. In 2015, radio ads made up about 7.8% of all money spent on media in the U.S.

Radio Advertising in the United States

How Radio Ads Began: Early History

Long before radio, people found ways to advertise using audio. In 1893, in Budapest, Hungary, a service called Telefon Hírmondó was like a "telephone newspaper." It played news and entertainment, and also sold short ad spots to reach its listeners.

Early radio stations, from the late 1800s, used simple equipment that could only send Morse code. But by the early 1900s, new inventions allowed radios to send sounds and voices. At first, these were used for talking between two points. Soon, people started experimenting with broadcasting news and fun programs. These early broadcasts sometimes acted as ads for the radio technology itself or for the people who owned the stations.

It became common for stations to play music records in exchange for mentioning the record companies on air. For example, in July 1912, Charles Herrold in California started weekly radio shows, playing records from the Wiley B. Allen company. Later, in 1916, Lee de Forest worked with Columbia Gramophone to play their records, mentioning the company with each song. He also advertised his own radio products for a while.

Radio's Early Challenges and Costs

During World War I, all civilian radio stations in the U.S. had to stop broadcasting. When the ban was lifted in October 1919, some stations continued playing records in exchange for mentions. For instance, Frank Conrad played records from the Brunswick Shop. However, by 1922, record companies worried that radio was making people buy fewer records, so these promotional broadcasts ended.

Many early radio stations were started by companies that made radio equipment, like Westinghouse and General Electric. Department stores like Gimbel's also started stations. They wanted to give their customers something to listen to on their new radios. But running a radio station became expensive, especially when performers started getting paid and music publishers wanted money for the songs played.

The First Paid Commercials on Air

In February 1922, the AT&T Corporation announced a new idea: "toll broadcasting." This meant they would sell airtime to anyone who wanted to broadcast a message. Their primary station, WEAF in New York, aired the first official paid radio commercial on August 28, 1922. It was for the Queensboro Corporation, advertising new apartments in Jackson Heights, Queens.

At first, some people thought radio advertising was a bad idea. An article in Radio Broadcast magazine in November 1922 worried about too many ads. But no other way to pay for radio stations worked as well. By the late 1920s, most U.S. radio stations were playing programs sponsored by advertisers.

Radio's Golden Age and Modern Listening

During the "Golden Age of Radio" (roughly the 1930s to 1950s), advertisers often sponsored entire programs. They would say things like, "We thank our sponsors for making this program possible." Radio stations experimented with different types of shows, and advertising became a big business. Companies like Philco would have their name mentioned many times during their sponsored shows. Comedians even used radio to show how powerful sound and imagination could be for ads, like Stan Freberg's famous cherry commercial in 1957.

The radio industry has changed a lot. Even with new technologies and other types of media, most people (about 95%) still listen to the radio every week. Listening to Internet radio has also grown a lot, from 12% in 2002 to over 50% in 2015. Studies show that many listeners (about 92%) stay tuned even when commercials come on.

Types of Radio Advertisements Explained

Radio commercials come in different styles and lengths. As radio technology improved, so did the ways ads were presented. The two main types of radio ads are "live reads" and "produced spots."

Live Reads: DJs as Advertisers

A "live read" is when a DJ (disc jockey) reads an ad on the air. They might read from a script or just talk about the product based on what they know. Sometimes, the DJ will even "endorse" a product, meaning they say they like it or recommend it. This makes the ad feel more personal, like a friend giving a suggestion.

Produced Spots: Recorded Commercials

"Produced spots" are more common. These are ads that a radio station or an advertising agency records for a business. They can include many things:

• A simple voice reading with sound effects or background music.
• A short play with different characters talking (dialogue).
• One person acting out a character (monologue).
• Catchy songs or tunes called jingles.
• Combinations of all these.

Studies show that how good an ad sounds is just as important to listeners as how many ads they hear.

How Radio Stations Sell Ad Time

Today, radio stations usually play their ads in groups, or "clusters," throughout the hour. Research suggests that the first or second ad in a group is often remembered better than the ones that play later.

Understanding Radio Audiences and Data

Nielsen Audio is a company that collects information about who listens to which radio stations. Most radio stations and ad agencies use this information because it's very important for selling ads. Advertisers want to reach a specific group of people, called a "target demographic." For example, a company selling video games might want to reach men aged 18 to 49. The Nielsen ratings help advertisers choose the right stations and times to reach their target audience.

These "numbers" show who is listening, when they listen most, and how many people can be reached with a certain ad schedule. This helps advertisers pick the best stations and times to run their ads.

Stations also have access to other information, like from Scarborough Research, which tells them even more about their listeners. This can include what activities listeners enjoy, their jobs, income, what cars they drive, and even places they visit.

How Ad Prices Are Set for Broadcasts

Radio stations divide the day into "dayparts" to sell their airtime. Common dayparts are 6 AM-10 AM, 10 AM-3 PM, 3 PM-7 PM, and 7 PM-midnight. Ads played after midnight are called "overnights."

"Drive times" (morning and evening commutes) are usually the busiest and most popular times for listeners. This means the "rates," or prices the station charges for ads, are usually higher during these times.

Ad rates can also change depending on the time of year. January is often a slower month, so stations might offer specials. But in warm-weather places like Florida, where many people visit in winter, rates can be higher when the population grows. The price also depends on how well the advertiser and station negotiate. During busy times, stations can even sell out of ad spots because there's a limited number of minutes for commercials each hour. While stations used to run a lot of ads, today they average about nine minutes per hour.

So, ad prices depend on the time of year, time of day, how well the station reaches the advertiser's target audience, how popular the station is, and how much demand there is for ad spots. The more popular the station and the busier the time, the more an advertiser can expect to pay.

Ad Lengths and Online Streaming Ads

While 60-second ads are most common, stations also sell 30, 15, 10, and even 2-second spots. Thirty-second ads became more popular in radio after Clear Channel Communications started its "Less is More" plan in 2004. Even though shorter ad breaks might help listeners remember ads better, studies suggest that 60-second ads might still be better for remembering the brand and message.

Ten-second spots, called "billboards," often run next to station features like traffic reports. They might say, "This traffic report is brought to you by..." Fifteen-second spots are usually for station promotions, but some stations sell them too.

Some stations also sell ads for their online streaming broadcasts. These might be the same ads heard on the radio, or they could be special "live reads" created just for the online stream.

Why Radio Advertising Works for Businesses

Most Americans (more than 8 out of 10) think that listening to commercials is a fair trade for getting free radio. Radio advertising can be a good way for local businesses to reach customers because it's often cheaper than TV ads.

Studies show that radio ads can make listeners feel emotions. This can make the ads feel more personal and lead to people remembering the business or buying its products. About 25% of listeners say they become more interested in a product when they hear about it on their favorite station.

Local DJs often build a special connection with their listeners. This means listeners are more likely to trust what the DJ says and respond to their messages. "Live endorsements" (when a DJ recommends a product) are becoming very popular because they can grab listeners' attention. Studies show that live reads have higher recall rates than recorded ads. Because of the trust listeners have with their favorite station, about 26% are more interested in a product if a DJ endorses it.

Rules for Radio Advertising and Fairness

The Communications Act of 1934 created the FCC, which makes rules for radio and TV broadcasting. To make sure everything is fair, the FCC set up "sponsorship disclosure" rules. These rules mean that listeners should know when someone is trying to persuade them to buy something.

Announcing Paid Mentions on Air

Section 317 of the Act is important for advertisers. It says that if a radio station gets money, services, or anything valuable in exchange for mentioning something on air, the station must tell its listeners about it. For example, if a cell phone company gives a free phone to a DJ, and the DJ then talks about how great that company's service is, the DJ must say that it's an advertisement.

Usually, listeners can tell the difference between a radio ad and regular programming. The law has an "obviousness" rule: if it's super clear that something is an ad, then a special announcement might not be needed. But if anything of value was exchanged for an on-air mention, the station must disclose it.

The Federal Trade Commission (FTC) also helps regulate the broadcast industry. They make sure that ads are not false or misleading. In October 2009, the FTC published rules saying that if someone endorses a product, they must clearly say if they have a "material connection" with the seller (like getting paid or receiving free products).

Sometimes, it can be hard to tell the difference between a DJ just talking and an ad. This is called "blurring" entertainment and advertising. Marketers sometimes try to put products into shows in a way that listeners might not realize it's an ad.

See also

• Jingle
• Promo (media)