"I Was There"
Seventy-Sixth of a series ...

I received an e-mail from a very prominent broadcaster last week.  This gentleman is regarded by many as one of the top COO’s.  He asked me for my take of the change from diary to electronic/whatever ratings.  Here are the highlights of my reply to him: 
 

1. Based on the latest information I have it seems as though the advertising agencies are going to increase advertising dollars if broadcasters provide a more sophisticated (maybe reality-info) audience reporting system. And they may decrease radio ad budgets without it. That may be small talk…or big talk.  We won’t know until the talking is over.
2. The top 50 markets will utilize the aforementioned device.  It will be too expensive for the rest.  This may not be good news for markets rated 51 to 250 who presumably will still be measured by the diary method.  The agencies MAY want consistency in measuring all markets. This is uncertain.
3. It is good that Clear Channel is talking to other broadcasters and research people about an alternative to Arbitron’s PPM.  This does not mean the PPM is not an accurate device…I don’t know having never had the results from Philadelphia in hand.  I am relying on what I have read in the e-trades.  However, it makes sense to me to look at ALL alternatives like those upcoming from Clear Channel.  The broadcasters and ad agencies will vote in some form or fashion for their choice in the next year or so.  I will hope that the broadcasters such as Cox and Radio One who are not in love with the PPM method will continue conversations with Arbitron about their concerns…and also discuss their issues with the new Clear Channel approach whatever that may be.
4. PPM discovered in the Philadelphia test that morning drive has lower AQH than the diary method; however, the other day parts have more AQH.  This will  produce higher rates and more revenue in other day parts.  It also makes a morning PERSONALITY more important to the ad agency buyers...this is a personality that the ad agencies KNOW can deliver product sales with LIVE commercials….Ryan Seacrest in Los Angeles comes to mind.  Radio stations can charge more for the morning ROI live spot PERSONALITY results…possibly more than they charge now.  Time buyers are very vocal that ROI is important to them....period. A research method to determine who is a real ROI morning personality will become common in the next three years. Today…this minute….stations should start even more extensive morning research to determine what makes a morning personality a morning personality!!!  
5. The PPM test also reflects that the cume is much higher than the diary method reflects. To my way of thinking this is good news.  I like the cume/circulation approach as well as AQH….it just makes sense to have more good numbers to sell to advertisers. The more the better. The circulation and AQH combination may be a terrific sales formula. If I were an agency buyer I would like to see both.

For those who understand unrated markets KNOW that ROI is important to Mr. Smith’s Clock Shop. If a personality or station cannot provide immediate ROI to a merchant they will not sign a new contract. I know because I WAS THERE asking for a renewal.  Mr. Smith knows in one week whether his spot schedule is working by the number of clock sales.  In the larger rated markets ROI must be proven by ratings, and other research such as the morning show ROI described above.  

I am in favor of ROI accountability in the TOP 50 markets because the word will flash through the ad business bringing NEW advertisers to radio.   

We in radio…regardless of market size…know that radio delivers ROI.  Heck, we see it every day.  But, we must chronicle this information in many forms for the ad buyers so they will understand what we already know!!!!  

e-mail Kent kent@kentburkhart.com