Six in Ten Local Ad Buyers Lack ROI Tools, Creating Opportunity For Radio.

The last-click phenomenon, where a website that sells a product gets credit for the sale, not the radio ad that sent the shopper to the site, has opened the eyes of many advertisers who don’t really know what media plan is working. Borrell Associates’ spring survey of local ad buyers reveals nearly six in ten do not have a process to measure return on investment for their ad spending. It finds that while 44% do have systems in place, 39% say they are flying blind with no way to know for certain what is driving results for them.

“The ROI has always been an issue for advertisers. Perhaps that’s the reason that 59% of advertisers aren’t even sure their budgets are right-sized,” says Center For Sales Strategy CEO Matt Sunshine. In Borrell’s summer chart-of-the-week series vlog post, he suggests that lack of ROI certainty creates a “great opportunity for real leadership” by local broadcast ad sellers.

“The ROI issue is a great way to learn and to really help an advertiser,” Sunshine explains. “If they’re among the majority that are not measuring ROI, they might like to know how their colleagues are going about doing it to help them improve their investment in advertising, or even refine the way they measure and instill trust in you as an advisor or as an expert, ultimately leading to making the sale.”

Borrell’s survey finds that among those who say they have a way to measure ROI, more rely on website analytics than their own transactional data. Its survey finds nearly two-thirds (64%) of those local buyers who have an ROI measurement technique say they are using website analytics. That is four points more than those local buyers who say they use information like sales, orders, and attendance data collected internally. And six in ten (59%) say they use social media engagement to understand what marketing is working for them. That is higher than the four in ten that say they use unique URLs, QR codes, and call tracking to keep tabs on their marketing effectiveness.

The survey also points to an opportunity for ad reps. Borrell says a majority 54% of the local marketers it surveyed said they rely on data and metrics from their media partners to decide what is working for them. And more than a third (36%) say proof of advertising—like hearing the ad on the radio station themselves or obtaining tear sheets showing an ad online—is enough to satisfy them.

The conversation around return on investment is likely a driving factor in survey data showing six in ten local business ad buyers lack confidence in the amount of money they are spending. The firm’s spring survey of small and medium-sized businesses finds 41% of spenders think they are spending the appropriate amount on advertising. The remainder has varying levels of doubt. That includes three in ten who say they are probably putting too little money into marketing, which is twice the number that thinks they are overspending on advertising.

As Inside Radio reported earlier, Borrell’s survey finds just one in five (22%) of local ad buyers believe they are under-investing in marketing to change based on current business conditions. It finds that nearly half (45%) conclude that they’re putting too little into advertising based on a comparison to what their competitors are spending. And in a related number, 19% say they think they are losing business to competitors that advertise more.

Businesses are also tying ad spending to ROI, as nearly four in ten (38%) say they aren’t getting enough leads or business growth. And 10% say they have failed to gain traction from new product and service launches without the required level of marketing spending. Borrell’s data shows some local buyers also have doubts about previous efforts. It finds 11% say they failed to see a big enough return on investment from previous campaigns.