The Radio Ad Effectiveness Lab recently released a study on "Radio's Return on Investment Compared to Television." It demonstrated that radio's return on investment is higher than television. The Television Bureau of Advertising said examined the study in detail and says, it provides data that strongly "supports the effectiveness of television." Only by adding several layers of estimated costs does RAEL attempt to position the findings in a positive ROI light for radio.

TVB notes the radio study reports that a television-only campaign delivers the highest estimated sales lift. The RAEL study offers four scenarios: radio in presence of TV, radio in absence of TV, TV in presence of radio, and TV in absence of radio. The highest estimated sales lift (7.7%) was delivered by TV in absence of incremental radio. The lowest was delivered by radio in absence of TV (3.6%). Simply put, says the TVB, the best results were produced by TV with the least radio, the worst were produced by radio by itself.

Other flags raised by TVB about the study:

* This is a study comparing radio to national television. Local TV was not part of the study in any way. To whatever degree the conclusions of this complicated, assumption-based study are representative and translatable, it is ultimately a comparison of a local medium to national TV.

* TVB's "Geography of ROI" presentation, based on MMA's simulation technique, documents how local broadcast TV (through its superior targetability) improves the ROI of national TV. One of the great weaknesses of national cable is that its typical schedules throw very little effective weight into local markets due to its small ratings. Major advertisers who buy very large schedules for individual brands can mitigate this to some degree but the TRPs in this test would not approach the thresholds necessary to accomplish that.

* The comparative ROI conclusions of the study are based on allocations of estimates of national TV costs and have no foundation in actual local market TV pricing.

* It's a study of four package goods (two grocery products, two OTC drugs), advertisers who currently use network radio, and was conducted in four very small markets. Are these small towns representative of the country at large? Are these radio-oriented advertisers projectible?

MBR observation:
Well, we often see TVB and CAB going at each other, why not the TVB and RAB? While we welcome RAB's response to this TVB study, we would like to provide a quote from Carat Americas CEO David Verklin, on the effectiveness of using more media together on a campaign: "I'll give you a very simple fact; call it 'Verklin's Law.' ROI is directly proportional to the diversity of the media mix and the degree of interactivity in the media plan. We have seen that fact through our market mix modeling analysis of over 800 brands."

Point being: All media is effective, it's how you use it and how different types of media are used in conjunction with each other that gets the job done. Therein lies the talent and mastery of ROI. Media shouldn't always be so quick to dismiss their brethren, but to show how well they can perform for a client when used together. Conglomerates like Time-Warner and Viacom probably have plenty of internal studies proving just that. Care to share?