Advertising Terminology

Advertising Terminology

A. Reach and frequency. Reach is the total number of different people reached with an ad, in a week's time. Frequency is the number of times a person hears or sees an ad in a week's time.

B. Vertical and horizontal. These terms refer to the way radio advertising schedules are sold. Every radio schedule sold is either a vertical schedule or a horizontal schedule. A vertical schedule is one that you'll sell a business when they have a limited-time sale going on…one that requires an immediate action by the listener to get to the business before a certain deadline. A vertical schedule will run a minimum of 5 ads per day over a 24-hour period, for a minimum of 3 or 4 days. Obviously, more ads per day reach more people, and works better for the advertiser. A horizontal schedule is one where you sell the advertiser one ad per day, but at a time when a huge number of people are listening. Most of the time in small market radio, an example of a horizontal schedule would be sponsoring the 7am local news every day Monday thru Friday. Horizontal schedules must be there at the same time every day, in order to be effective.

You can sell a combination of vertical and horizontal schedules, with the horizontal schedule running every week, and vertical schedules running when the advertiser has a special sale, promotion or event. Radio stations usually give the advertiser that runs a regular or horizontal schedule, a discount when they buy an additional vertical schedule. Vertical schedules are sometimes called "blitzes" in the radio industry.

C. Copy or script. Radio advertising copy is called "copy" or "script". Both terms are used to talk about the actual script that a radio announcer reads or records for the advertiser.

D. Co-op advertising. This is short for cooperative advertising, which is where the manufacturer provides the local business dollars to promote their product, based on how much product the local business buys from the manufacturer. Most co-op programs are 50/50, meaning the manufacturer will match the local business when advertising the manufacturer's product, and most co-op programs offer 2 to 5 percent of the local business' purchases from the manufacturer. That means when a local business spends $10,000 to buy goods from the manufacturer, the local business gets $200 to $500 to spend to promote that manufacturer's product, which means you as a radio advertising salesperson have the potential of selling $400 to $1000 in radio advertising to that local business to promote the manufacturer's product. You MUST strictly promote the manufacturer's product in the ad, and many times you have to use pre-written or pre-recorded ads provided by the manufacturer, in order for the local business to get the co-op dollars from the manufacturer.

When a local business runs "co-op" on your radio station, your radio station must provide documentation that the ads ran and at what times. That documentation is then sent on by the local business, to the manufacturer, so the local business can get their coop monies. This documentation includes notarized affidavits showing the exact times the ad ran, and notarized scripts certifying that the copy ran, how many and at what rate. This is a tremendous amount of paperwork for the radio station to generate, but it's part of doing business with local advertisers that want to use co-operative advertising dollars. Co-op dollars can be a great source of additional revenue, to get a local business on the air, or to upsell an existing advertiser.

E. Pitch. A radio term for a presentation you give to a prospect. It can be long or short, depending on whether it's the first time you've called on the prospect, or if the prospect knows all about your radio stations.

F. Radio advertising order form. The form that is usually signed by both yourself and the advertiser, which is a binding agreement that the advertising is buying "X" number of ads on your radio stations.

G. Commission. The amount of money you earn from the sales you make.

H. Billing. The value of the advertising schedule an advertiser runs on your stations. There is the individual billing one advertiser runs, there is the total billing on your account list, and there's the total billing your radio stations generate. All refer to the value of the advertising schedules an advertiser runs on your stations.

I. Collections. The amount of money that advertisers pay for schedules they've ran on your radio stations. Most radio stations pay salespeople a percentage commission on total collections of that salesperson's accounts from the previous month. Example: If your accounts paid a total of $10,000 in July, and your commission rate is 20%, then you'll receive $2000 in your paycheck on August 16. If your stations pay twice a month, usually they give you the option of how much of that $2000 you want on August 16, and how much of that $2000 you want on September 1.

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