Isn't there only so many $ advertisers will spend on radio in any market and this just cuts that pie into more pieces? Car dealers were on every street corner in 2007. That didn't increase the number of Honda Accords the consumer bought, it just meant that the sales were split in thirds because 2 more Honda dealerships popped up in the area and people gravitated towards the one most convenient. I don't think you need a specific dealership more than every 30 miles, a Subway in every strip mall and 50 stations on the dial with a ton of overlap.
Depending on the businesses stance, they may not need to spend money on advertising. Let me put it in terms we should all know well
Say Pepsi, a internationally known company, wants to advertise; well - Most people KNOW Pepsi! However, if... say, RC Cola wants to advertise - They would have more of a reason to spend money. Lesser known brand, lesser known company. Most people know Pepsi, thereby advertising it on every corner is ill-advised. RC Cola could benefit from it - get people thinking "Oh, I'd like to try that!" That'll get RC Cola's name out there, as to where Pepsi's already as. This is why it's silly to advertise Honda - they're well known, but if I were to advertise a new model, it'd become known. Advertising can be used to introduce, convince, reassure, and even give a company a new image.
With radio, advertisers pay for what they see fit. If it works, they'll continue paying to advertise.