There may be no hotter ad category right now than home improvement. The vertical, which includes a wide swath of products and services from kitchen and bath to lawn & garden to electrical, plumbing and hardware, is flourishing due to a red hot real estate market and a DIY craze triggered by people spending more time at home due to the pandemic.
Limited housing inventory and low interest rates continue to push single family home values sky high. That has many homeowners borrowing against the equity in their home to make major improvements rather than buy a new property. “That bodes very well for home improvement activities,” says Grant Farnsworth, president of Farnsworth Group, a research firm that focuses on the home improvement and building sectors.
Consumer confidence is also on the rise. The Conference Board Consumer Confidence Index hit 91 in February following a drop to 86 at May during the early depths of the pandemic. Contractors are also feeling upbeat. “There is overall optimism in the market,” Farnsworth told attendees of “Radio Works for Home Improvement,” a live streaming session presented Wednesday by the Radio Advertising Bureau.
When it comes to share of the home improvement retail market, Home Depot and Lowe’s, two of radio’s most consistent advertisers, collectively capture about 60% of the market, per Farnsworth research.
Online Retail’s Marketing Challenge
As seen across the entire retail industry, COVID accelerated the shift to online purchasing as stores made it easier to shop from home and added curbside pick-up and home delivery options. But that also reduced retailers' ability to influence customers when they’re physically in the store. “If they’re not coming in, these stores have to find a way to communicate and engage with these customers. Radio can be that opportunity,” Farnsworth argued. “They're not walking into a Home Depot but my gosh they’re still listening to radio, they’re still listening to mediums, digital or otherwise, that Depot and Lowe's and other suppliers now need to leverage to be able to influence.”
Meanwhile, customers are shopping on slightly fewer channels which has caused stiffer competition. At the same time, 20% of DIY-ers and 30% of professional home improvement customers tried a new home improvement brand in the last 12 months. “The consumer is moving around, they’re open to change right now and manufacturers and suppliers are looking for a way to influence that change,” said Farnsworth. “Using radio as that platform to gain brand awareness, to increase brand health and equity is a real important play.”
Showing how that plays out in real life, the RAB session included presentations from a pair of account execs. Ruth Wardrop, the top ad seller at Seven Mountains Media for the past five years, walked attendees through a campaign for Expert Home Builders in Central Pennsylvania. The client was a staunch advocate for word of mouth marketing so Wardrop and her team built an on air campaign around client testimonials, leveraging radio as “a giant megaphone telling your happy clients story to thousands of listeners instead of waiting for organic word of mouth,” she said. The testimonial campaign continues to bring new home builders in the door so much so that the annual radio plan has been renewed and refreshed year after year, she said.
Meanwhile, Larry’s Lumber & Supply in Bloomsburg, PA faced the challenge of having both Home Depot and Lowe’s stores less than a mile away. Wardrop fashioned a Mobile Conquesting Campaign that used behavioral targeting to reach Home Depot and Lowe’s shoppers within a 15-mile radius of Larry’s Lumber on their mobile devices. A geo-fencing component served ads to people who were on the premises of Lowes and Home Depot and the digital campaign was complemented by a radio buy. The client saw an uptick in customer orders, while creating buzz among new and existing customers. The digital campaign produced a click through rate of 0.3%, more than four times the national average. That shot up to 4.2% when the ads were geofenced. The result: The client continued both his radio and digital campaigns, even during the pandemic.
Anna Koehler, an account exec at Hubbard Radio in Minneapolis, showcased three successful campaigns, including one for a home-washing service that relied on personality endorsement ads. Key to its success was getting Dez from the morning show on hot AC “KS95” KSTP to develop a strong relationship with the business owner. The campaign really took off when Dez talked about the client cleaning her mother-in-law’s home which evolved into a morning show bit that lit up the phones.“Now we’re the only station they use and they doubled their business,” Koehler said.