Direct Response in Radio Advertising

Introduction

The use of direct response is widely integrated throughout all advertising media — direct mail, catalogs, telephone marketing, newspaper, magazine, television, radio, Internet, and other media. Direct marketing sales growth continues to outpace overall sales growth in the U.S. economy, with direct response ad spending comprising over half of total U.S. advertising expenditures⁵.

The most popular direct response mechanism is the toll-free number. In the 30 years since the toll-free 800 number was first introduced, the telemarketing industry has grown from seven million calls in 1967 to over 34 billion in 1997⁶. In 1998, over $482 billion in goods and services were sold through telephone marketing, while over $429 billion were sold through direct mail. Total direct marketing sales in the U.S. are expected to exceed $2 trillion by 2004⁷.

Telephone-based, interactive technologies have become one of the most powerful ways to attract, motivate, and retain customers. Telemarketing is an established, cost-effective tool providing personal, two-way communication at a fraction of the cost of face-to-face contact. Telephone media cut through the clutter of traditional advertising, offering more opportunity for consumer involvement than any other medium. The most frequent consumer uses of toll-free numbers are for requesting information, ordering products, and making reservations⁸.

Researchers have found that a properly managed toll-free number offers three principal benefits to a company: improved customer satisfaction, leading to brand loyalty and increased sales; reduced customer service costs; and increased customer information, leading to improved product/service design, production, and delivery^9,10. All of these factors relate to building strong, long-term relationships with customers while keeping costs low.

In addition to serving immediate prospect, customer, and company needs, toll-free numbers provide a constant stream of information about prospects and customers, allowing for better database management and staffing arrangements. Knowing customer needs leads to clearer and more timely communications with them.

Consumers have incorporated toll-free numbers into their daily activities and use them for everything from ordering products to making financial transactions. Toll-free numbers are free, easy to remember, convenient, and simple to access. Researchers have found that over 50% of consumers use toll-free numbers frequently, while only 3% never use them¹¹. Overall, 89% of consumers use them¹², with one-third of Americans making 60 or more toll-free calls per year¹³. Use of, and satisfaction with, toll-free numbers increases with education level, as does the propensity to order products rather than simply request information¹⁴. According to Bank Marketing, 86% of customers associate toll-free numbers with high quality products.

Toll-free numbers have achieved a high level of acceptance with a broad range of consumers in many areas of the marketplace — consumers have even begun to expect organizations to have one¹⁵. Ten years ago, only half of the nation’s largest firms offered toll-free numbers; today, nearly 90% do. More than half a million businesses and government agencies accept toll-free calls. Large businesses receive about 3,500 toll-free calls a week, compared with 260 letters or faxes¹⁶.1-800-FLOWERS, a business based on its toll-free number, receives over 9 million calls a year. On an average business day, 40% of the calls on AT&T’s network are toll-free calls.

As companies continue decreasing their marketing and sales costs through the integration of technology into their relationships with customers, toll-free numbers will become an ever bigger part of satisfying both parties.

Objectives

This study documents the use of toll-free numbers and other direct response mechanisms in radio advertisements. Our objective was to see how prevalent direct response has become in this medium. We also wanted to learn which toll-free prefixes were being used (800, 888, or 877), as well as which types — vanity (numbers that translate into words for easy recall; e.g., 1-800-NEW-CARS), or numeric (e.g., 1-800-639-7543).

We also wanted to determine:

• Radio formats in which toll-free numbers are used
• Industries using toll-free numbers
• Prevalence of Internet addresses in advertisements

Methodology

Over a seven week period, radio broadcasts were taped for later listening. The following radio formats were listened to (286 total listening hours throughout all dayparts):

Stations were chosen from among the most successful stations by format in the top 100 markets around the country. This yielded a total of 3,311 radio advertisements.

An independent contractor reviewed the radio broadcasts, collecting the information required for the analysis. The data was then tabulated and compiled by an independent information systems contractor.

For each advertisement, the following data were collected:

Published July 11, 2000
Copyright © 2000, 800 Response. All rights reserved

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