Revisiting the Strategic Role of Terrestrial Radio in Automotive Advertising
This session, originally presented by C-4 Analytics on the Digital Dealer platform, dives deep into the strategic challenge of radio advertising. For many dealers, radio is a cultural and generational tradition, but it consumes vast amounts of budget yet produces less and less return.
The central goal is not to bash radio but to understand the cold, hard math of its effectiveness and learn how to move those dollars into more profitable media.
The Problem: Radio Hurts Digital Sales
Dealers often invest in radio because it feels like a powerful, cultural medium (the $835 million spent annually is a testament to this). However, this investment often backfires:
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The Pump-Priming Trap: You may provoke a positive response ("It's time for a new car!"), but the shopper immediately goes online to start the 87-day buying process.
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The Competitor’s Advantage: Once online, the shopper leaves digital breadcrumbs. Your competitors, who are smarter about their digital spend, buy this data and ambush the customer with targeted ads throughout the rest of their buying cycle.
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Result: You spent money to help your competitor upgrade the shopper into a new vehicle. Radio helped them buy a car—just not from you.
The Evidence: Terrestrial vs. Streaming Audio
The massive shift in consumer behavior away from AM/FM frequencies has fundamentally devalued terrestrial radio as a broad reach tool.
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1,000x Advantage: For every 1.2 billion songs played on terrestrial radio in the U.S. annually, one trillion songs were streamed. Digital streaming audio is a thousand times bigger than terrestrial radio.
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Addressable Audience: 77% of those streamed songs are advertiser-supported digital media, which means the audience is addressable. You can layer in data filters to target in-market buyers, not just broadcast to anyone within range of a signal.
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Inertia is Costly: Historically, dealers spend 10% of their total ad budget on radio (up to $130,000 annually), even though only 60% of dealers participate. This vast spend is mostly focused on AM/FM, even as the audience migrates to Spotify and Pandora.
Radio’s Place in the Mix: Dominate the Funnel
Radio still has a place, but its portion of the budget must be determined by data, not emotion or history. The strategy must invert the budget flow: start with digital dominance, then use leftover funds for broadcast.
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Own the Digital Funnel First: The fundamental rule is to own the low-funnel (Am I Getting a Deal?). Calculate what you need to spend to achieve a dominant Impression Share in your target ZIP codes. Use the Google Store Visits metric and ROI calculator to dial in efficiency.
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Move Up, Then Out: Once you own the bottom, dominate the middle and upper funnel, where the manufacturers advertise. Only after you have covered all digital bases and calculated the necessary spend for dominance should you look at traditional media.
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Use Radio for Specificity: If you must use radio, use it for events (food drives, community engagement) where its value is in its mass reach for a specific, non-sales goal. Do not rely on it to drive sales alone.
The change has already happened. You must decide whether to continue sacrificing your digital impression share at the altar of terrestrial radio or fully embrace digital audio to efficiently target the customer who is already on the path to purchase.
Watch the Full Webinar
For a deeper dive into these topics and to hear directly from Rob Stoesser, Vice President of OEM, C-4 Analytics, watch the full webinar below.