Radio Impacts - Small/Medium Markets

[John FL]

There's an interesting recent article in 'All Access' entitled 'Radio Has a Large Impact in Medium And Small Markets, finds Nielsen." Here's a link to it:

http://bit.ly/2qRMcPn

The article did not explain what constitutes a medium or small radio market. While All Access is a radio trade, it was probably figured most of the readers have or had a career in radio and this would not require explanation. However, in this venue, I believe it's a detail that can add clarity. I'm not exactly sure where that line is drawn.

According to Nielsen, 98% of adults 18+ use radio monthly in small/middle markets. In this, are 94% of adults 18-34 along with 99% of adults aged 25-to-54. That's quite impressive given all the competing alternatives that are available to consumers. I admit to being somewhat surprised at this. But then again, maybe I shouldn't be. I am a subscriber to SiriusXM but I still tune in to conventional radio, at times, for all sorts of reasons, but mainly it's to stay connected locally.

What I also found interesting is the appeal of country music across gender and a large swath of age groups. Florida has uniqueness in that various regions of the state differ greatly from each other. Much of this is based on the amount of diversity in the market. Here on The Treasure Coast, country performs well. Go further south, especially past West Palm and into a large market such as Miami/Ft. Lauderdale and country is more a niche format.

While I don't like to generalize, country music tends to grow in popularity the further north one goes in the state to especially include the Florida panhandle.

I was especially surprised to not see commentary about today's classic hits format. It's in many Florida markets and overall it appears to perform well in just looking at audience shares. Perhaps this was just an overview article and Nielsen probably has listener preferences on more than just a handful of formats.

In answering the question about "who is the medium and small market consumer,?" I found the following statement worth mentioning:

"Medium and small market radio consumers are evenly split among gender lines. From an age perspective, nearly 60% are between the ages of 18-54 - a coveted audience for advertisers. Meanwhile, another 40% are age 55 and above. These users not only consume radio frequently, but hold enormous buying power which makes them an ideal target for many businesses."

I've highlighted the last portion of that statement as that has been a frequent discussion point on the radio boards. Apparently, there are circumstances based on market size and the availability of certain demographics that allows for radio formats not found in larger markets. Specifically, I can look at a Soft AC in the northern Treasure Coast/southern Brevard County known as '97.1 Ocean FM' (WOSN). They feature soft favorites from mostly the 70s and 80s. I've heard lots of local advertising and I've even gone to some of the businesses and restaurants as a result. They serve an area (based in Vero Beach) that has a large percentage of seniors. They are a breath of fresh air playing music the bigger markets won't touch.

It may also explain why most of the Treasure Coast now has two variety-based Classic Hits stations as well. After leaving Jax almost 2 years ago, I'm finding certain advantages in living in an even smaller radio market.

 

[davideduardo]

There's an interesting recent article in 'All Access' entitled 'Radio Has a Large Impact in Medium And Small Markets, finds Nielsen." Here's a link to it:

http://bit.ly/2qRMcPn

Here is the actual report https://www.americanradiohistory.com/Arbitron-Market_Maps.htm

The article did not explain what constitutes a medium or small radio market. While All Access is a radio trade, it was probably figured most of the readers have or had a career in radio and this would not require explanation. However, in this venue, I believe it's a detail that can add clarity. I'm not exactly sure where that line is drawn.

Big markets: PPM markets. Small and Medium: Diary markets. The context is Nielsen measured markets.

Nielsen ranks 263 markets that they have defined and measure. There are additional ones they do not measure. The Nielsen list is at https://www.americanradiohistory.com/Archive-Arbitron/Red-Blue-Books/RedFall19.pdf

What I also found interesting is the appeal of country music across gender and a large swath of age groups. Florida has uniqueness in that various regions of the state differ greatly from each other. Much of this is based on the amount of diversity in the market. Here on The Treasure Coast, country performs well. Go further south, especially past West Palm and into a large market such as Miami/Ft. Lauderdale and country is more a niche format.

Keep in mind that certain FL markets, starting with Orlando and Miami, are highly ethnic, where country has a much reduced appeal. The Miami MSA is only about 30% non-Hispanic white, and Orlando is about 50%.

While I don't like to generalize, country music tends to grow in popularity the further north one goes in the state to especially include the Florida panhandle.

Jacksonville and Tallahassee are Southern Georgia; Pensacola is Southern Alabama. Whatever works in Albany or Columbus, GA or Dothan or Mobile, AL works in the north Florida markets. It used to be said that Orlando was the southernmost city in Georgia, but that changed now that about 20% of Puerto Rico's residents moved to that market!

Apparently, there are circumstances based on market size and the availability of certain demographics that allows for radio formats not found in larger markets. Specifically, I can look at a Soft AC in the northern Treasure Coast/southern Brevard County known as '97.1 Ocean FM' (WOSN). They feature soft favorites from mostly the 70s and 80s. I've heard lots of local advertising and I've even gone to some of the businesses and restaurants as a result. They serve an area (based in Vero Beach) that has a large percentage of seniors. They are a breath of fresh air playing music the bigger markets won't touch.

Those are markets where agency business (aside from a few local shops) is non-existent. So demographics are not as big a concern, and in heavy retirement markets advertisers frequently want to reach seniors as they are good potential customers with no retail preferences since they came from somewhere else.

In larger markets, agency dollars make the difference, and a 55+ format is not an easy sale to transactional buyers.

 

[b-turner]

Much of my radio advertising sales experience is in smaller markets. The agency dollars are rare, if any at all. Most agency buys are directed by the local owner in some markets I worked that got buys. Most sales are direct with the business owner who typically could care less about how many are of a certain age that tune you in. They just want results. Even more than ratings and such, the relationship between client and salesperson is likely most important.

The result is formats the agencies won't buy, the business owner in small and medium markets will buy if you build a relationship and can produce results. One might argue that the same can be done in a major market. In my experience it cannot be replicated. The reason is the typical advertiser is a stand alone business and a major market station is going to be hard pressed to have enough listeners within a stand alone business trade area to produce results. The reason is the number of available signals. If that trade area is 60,000 and you're pulling a .1, then you have about 60 potential listeners to persuade to visit that stand alone.

Another reason formats that might not work in the major markets can work in small and medium markets is the universe of over the air signals. Typically there are fewer choices meaning it is easier to get a better percentage of the radio market listeners because the radio pie has fewer slices, so to speak.

Offering exceptional programming and acting like your competitor is nipping at your heels is required. I know of an AM is a county of about 40,000 that gets over 35% of adults 25+ and the loss per quarter hour is under 7%. You don't get that without great programming and local emphasis especially when the local listener can have their pick of 50 signals. Yes there's a translator. I'd say if you wanted to buy a station that would be the 'dream' station you'd gladly pay top dollar to get.

 

[John FL]

Here is the actual report https://www.americanradiohistory.com/Arbitron-Market_Maps.htm

Big markets: PPM markets. Small and Medium: Diary markets. The context is Nielsen measured markets.

Nielsen ranks 263 markets that they have defined and measure. There are additional ones they do not measure. The Nielsen list is at https://www.americanradiohistory.com/Archive-Arbitron/Red-Blue-Books/RedFall19.pdf

Keep in mind that certain FL markets, starting with Orlando and Miami, are highly ethnic, where country has a much reduced appeal. The Miami MSA is only about 30% non-Hispanic white, and Orlando is about 50%.

Jacksonville and Tallahassee are Southern Georgia; Pensacola is Southern Alabama. Whatever works in Albany or Columbus, GA or Dothan or Mobile, AL works in the north Florida markets. It used to be said that Orlando was the southernmost city in Georgia, but that changed now that about 20% of Puerto Rico's residents moved to that market!

Those are markets where agency business (aside from a few local shops) is non-existent. So demographics are not as big a concern, and in heavy retirement markets advertisers frequently want to reach seniors as they are good potential customers with no retail preferences since they came from somewhere else.

In larger markets, agency dollars make the difference, and a 55+ format is not an easy sale to transactional buyers.

Excellent analysis and response to my questions. I made assumptions about a number of things through the years. The PPM continues to remind me that much has changed as a result of moving to that measuring system. I long believed The Top 20 markets were the large markets and that was it! After all, we see that designation in many places, including Radio Discussions.

A good number of years ago, a Market Manager in Jacksonville was nominated for Market Manager of the year for a Middle size market. As I think about it, this happened during the diary days. And so for years, I thought of Jacksonville as a medium size market, even with their conversion to the PPM.

And while I understand your thought process that Jacksonville is southern Georgia as far as listener preferences/formats go, I believe the waters are rather muddied. I was a project manager there involved in numerous marketing projects over many years. It was my job to study the market and I learned quite a bit. Jacksonville has a certain reputation of being more of a southern city than a major city one would find elsewhere in Florida. But it's been transitioning.

Duval County has become a swing county in voting. In fact, I believe they voted Democratic in the last Governor's race. It's no longer as Conservative as it once was in large part due to people from New England and other "Blue State" areas who are making N. Florida home. Some time ago, the St. John's Town Center opened. It's not just an outdoor mall but an expansive shopping and dining experience that has brought thousands of jobs to the community. With that is an influx of new residents. The dynamics are certainly changing there. Still, stereotype about the community still exists.

It's yet another reason why I see Florida radio as a place where situations change rather rapidly.The country music format has long performed well in Jacksonville. There was a time, the heritage country station WQIK regularly earned double digit shares. In my time there, I noticed the overall shares of country showed some decline, to consider new competition as well. Today, it's hard to say as there are actually too many country signals of stations that don't subscribe to Nielsen. On the surface, it appears the country format in Jacksonville probably derives decent revenue since there are so many country formats there. But, in my view, there's short cited thinking.

To the south of Jacksonville is St. John's County which is in Jacksonville's MSA. There has been incredible growth there with people moving in from near and far. The county is red as a beet politically. The surrounding counties of Jax are highly conservative. I mention this because of another uniqueness of the market. News/Talk WOKV is often the #1 station in the market. It's been that way for years. That's not the case in many other Florida markets. It's another dynamic to Florida radio.

My biggest problem with Jacksonville radio is that I believed that were not inclusive enough to the community served. They are operating in the mindset of being "South Georgia" as you initially brought up.There has been some changes there. Perhaps change is a slow process and also I don't have actual Nielsen data to justify my feelings and interpretations.

 

[John FL]

Much of my radio advertising sales experience is in smaller markets. The agency dollars are rare, if any at all. Most agency buys are directed by the local owner in some markets I worked that got buys. Most sales are direct with the business owner who typically could care less about how many are of a certain age that tune you in. They just want results. Even more than ratings and such, the relationship between client and salesperson is likely most important.

The result is formats the agencies won't buy, the business owner in small and medium markets will buy if you build a relationship and can produce results. One might argue that the same can be done in a major market. In my experience it cannot be replicated. The reason is the typical advertiser is a stand alone business and a major market station is going to be hard pressed to have enough listeners within a stand alone business trade area to produce results. The reason is the number of available signals. If that trade area is 60,000 and you're pulling a .1, then you have about 60 potential listeners to persuade to visit that stand alone.

Another reason formats that might not work in the major markets can work in small and medium markets is the universe of over the air signals. Typically there are fewer choices meaning it is easier to get a better percentage of the radio market listeners because the radio pie has fewer slices, so to speak.

Offering exceptional programming and acting like your competitor is nipping at your heels is required. I know of an AM is a county of about 40,000 that gets over 35% of adults 25+ and the loss per quarter hour is under 7%. You don't get that without great programming and local emphasis especially when the local listener can have their pick of 50 signals. Yes there's a translator. I'd say if you wanted to buy a station that would be the 'dream' station you'd gladly pay top dollar to get.

In large markets, there's potential for greater revenue. There's also potential in making a lot more money in your career. There's also pressures. I suppose it's where you are in life, but I can see the lure in working in a smaller market. Do what you enjoy with far less stress. I've seen a number of seasoned broadcasters with impressive resumes and accomplishments. What else do they have to prove? As we hear so often, life is short. So, they find small community radio with perhaps like-minded people around them.

Here on the Treasure Coast of Florida, market #96 - Ft. Pierce-Stuart-Vero Beach, I find radio to be a cut above the larger markets in which I'm familiar. There's only two ratings reports that Nielsen provides. To your points about advertising and programing, I can see now how ratings don't play as big a role as elsewhere. I totally agree with your point that local advertisers want results and they probably don't care how old the listeners are but rather how willing are they to be impressed and make a purchase. It makes for a different kind of radio experience.

Some of you may think this is all in my head but I'm convinced I pick up more of a relaxed sound in the voices of local broadcasters in smaller markets. As corny as it sounds, they sound like they are enjoying themselves. The way Nielsen sets up ratings, it's almost like feast or famine. The PPM markets are surveyed 13 times a year to include the holiday book. That's a lot of performance appraisals to go through. Here in market #96, it's just twice a year. Perhaps a couple more would be optimal but why spoil a good thing?

 

[PTBoardOp94]

The diary markets which used to be "four books" a year were always continuous measurement. It was just a 3-month long period instead of a 4-week long ratings period.

One big difference between major market radio and small market radio is the universe of clients who could possibly be interested. In Fort Pierce/Vero Beach, just about any successful business could be an advertiser because there aren't as many choices.

If you run a one-off menswear/tailoring store in Chicago, advertising on radio probably will not be cost-effective for you because there are 20 other stores which sell suits and ties.

If you run a menswear store in Vero Beach, you are probably one-of-a-kind, and people will be more willing to find your place of business and patronize your store.

 

[b-turner]

I think stress levels are a bit less in smaller markets and programming, perhaps, not as crucial the smaller the service area you get. There is some truth in local information makes locals more 'forgiving' of the only station talking about the place they call home. Certainly this is directly related to number of signals in a given area.

From the radio sales perspective, the smaller the market size, the greater importance is the client/salesperson relationship. I always found in direct to business sales my job is to sell the client what they tell me they want for a price they can afford to pay. Literally I sell them their imagination. I have also found the smaller the market the less the business owner understands of how advertising works. For example, in one small market along a major highway, I had restaurants buying billboards versus radio, failing to understand the locals could be convinced/reminded to frequent the restaurant more by advertising in the hungry hours versus capturing the random traveler that just happened to be hungry while you were open for business. Today I point out Facebook is a nice way to stay in touch with existing customers. I have to ask them of that money you spent for X thousand views, how many were bots and how many were in your trade area that could become your customer. I say Facebook is you word of mouth, not advertising to get new customers.

I recall in one Texas market of 125,000, we had subscribed to the ratings but found they weren't essential when it came to getting the sale. It was the relationship with the client and general awareness of the station that got the nod. This station was in a never-ending fight for the top spot with a quality competitor. We won a few time more than they did but not by much. As for the sales end, we tended to lead them by a few thousand each month I suppose because we had simply been in the format longer and had a bit of that 'heritage' feel.

 

[John FL]

One big difference between major market radio and small market radio is the universe of clients who could possibly be interested. In Fort Pierce/Vero Beach, just about any successful business could be an advertiser because there aren't as many choices.

If you run a one-off menswear/tailoring store in Chicago, advertising on radio probably will not be cost-effective for you because there are 20 other stores which sell suits and ties.

If you run a menswear store in Vero Beach, you are probably one-of-a-kind, and people will be more willing to find your place of business and patronize your store.

You are correct and I never thought about small market radio from an advertising perspective.
The incorporated part of Vero Beach is a very small town. What took a little getting used to is the fact that there's not much in the way of consumer options.

When I talked about the metamorphosis of Jacksonville to the major cosmopolitan city it is today, it shows just how dynamic the state of Florida is as far as change goes. Back in the late 90's, I worked on a project in Gainesville and I flew a commuter plane back to Ft. Lauderdale each weekend. Almost the entire trip showed a rural terrain. Lots of farms and wilderness dotted with occasional housing. It was cool flying over 'Alligator Alley' and the Everglades and then coming into the urban sprawl that is the Ft. Lauderdale area. What a stark contrast!

I often wonder how much has changed in the visual for that flight.

I live in a community that was once a dairy farm. There's still a good number of them where I live on the St. Lucie/Indian River County lines. But then there's for sale signs all over. The price of land grows in value. Building is going crazy all around me. Sleepy little Florida towns are disappearing.

There's some interesting commercials that air here on the Treasure Coast on the radio. Many are voiced by the local talent on the station. It may be one noticeable difference between Agency and local direct. In some ways, it's a throwback to the time, even in big market radio, the jocks would do some of the spots. They added their own unique style plus they had credibility. Commercials were a bit more interesting in my view.

Yes, there aren't many consumer options where I live as far as stores and restaurants go, but I've discovered some fine places after hearing about them on local radio. I suppose that's one important aspect of radio. No matter the size of the market, effective advertising and results are key. Still, I wonder what revenue is like in smaller markets such as Ft.Pierce-Stuart-Vero Beach. With continued population growth, I would suspect that it can only improve.