Classic Puker said:
I think you missed the gist. CLIENTS... not "agencies"... are going to be demanding more bang for their buck, in a tighter economy. And in an age where pundits are always paying lip service to "alternative revenue streams", it seems contrarian to the point of retarded that these same, dollar-grubbing clients somehow will be comfortable, foregoing previously-foregone sources of revenue... like those unclean "older demos"... just because Everybody's Doing It. .
As I mentioned, clients of agencies and bigger direct advertisers do sales research... some is enormously sophicticated, like that of the package goods manufacturers like P&G and Lever and Coke. They evaluate different ad strategies (not stations.... each medium) for the best media mix. They look as PRISM groups and ethnicities and all kinds of other factors to determine the media to use and against what different demos do they get the best return on investment.
In the case of companies like P&G we are talking about hundreds of millions in consumer research for existing products, new products and developmental test products. These folks are not fools and they know who the consumers are and they know where ad and merchandising an dpromotional money brings the greatest returns.
I siad, "The main reason clients do not agressively go after 55+ is that there is no ROI. It takes more ads and money to sell the older consumer than the profit on the sale"
May I please have the exact month and year, that an agency (yeah, I know, "client"!) last made an "I", on which to expect an "R", when it came to courting those old, sedentary, indigent seniors? I believe the expression is, "Don't know it, 'til you've tried it". C'mon, these advertisers haven't spent a minute or a dime courting 55+ in decades..
Your lack of respect for the marketing skills of major advertisers is amazing. A little respect for the people we do business with is appropriate, not statemets that show you think some awfully good companies are staffed with morons.
Many of these companies do constant measurement of consumers, ranging from in-store or telphone surveys to focus groups and the staple of the package good industry, the antry check. Many combine to do omnibus studies of evolving consumer patterns to determine trending and attitudes. These are companies that know how many tubes of toothpaste sold in every county of the US by the next morning. Or companies like Wal Mart that can change the merchandise mix in a stoor overnight based on salse patterns or have goods produced in Asia on 12 hour notice to meet demand for trendy items.
You think they do not know what the ROI on advertising to 55+ is? And that it is a negative or barely break even number? Of course they do.
In general, clients of agencies advertise with the same theory that a fisherman uses: go where the fish are. This is why beers seldom market to over 50 or 55 and seldom to women... the return on marketing to 21-34 and 21-44 is vastly better, and demand from those cells is what gets facings, end aisle displays and other merchandising supoort at retail and in bars.
And when they did, it was ... as I thought I had pointed out... an older demographic with a considerably different lifestyle than the older demos of previous decades. And they stopped courting that demo, just in time when it would have paid off big..
I am sure that P%G or Budweiser or Coke or McDonalds can produce data on the first week of July showing sales vs. ad expenditure by demo for each product, type of packaging and down to the metro and county level for the entire US. The will know share of voice in each category and the ROI for advertising against each population group.
Since nearly all media has spillage beyond the demo any particular cleint buys, advertisers that do research will also know, compared to campaign delivery of other demos... including over 55... how much is generated in sales vs. the amount spent. In other words, if Bud buys men 21-44 for a "Summer Six Pack" campaign, they can also look at all media for delivery of women, men over 44, men over 55, etc., and see what they got for the spillage. If they were to see fabulous returns against a 55+ investment, every advertiser would be calling for 55+ CPP presentations tomorrow. They aren't.
Same as the way they killed the upper demo format of Oldies on CBS-FM's main analog channel, and put the Brave New Format on it instead... while moving the upper demo music to a younger-targeted technology (HD-2)!.
Advertisers do no look at specific fomat moves of individual radio stations (except for local agencies buying a single market, maybe) because they are buying campaigns across multiple media types with many radio, TV, and cable stations as well as, possibly print and outdoor and web or direct mail. We have to understand that what such agencies want is pricing and value added, not an explanation of how great Frankie Vallie was.
David, you know the Radio bidness. Is that thinking not the product of exactly the kind of visionary this racket produces on a regular basis?
.
I was GSM for a decade in a top 15 market where there were around 140 local ad agencies, ranging form McCann to Saatchi & Saatichi to "one man bands" and where any account of over $50 k had an agency. I increased sales by over 30% every single year, and became the market leading biller and rate setter the second year... and we did it by having good sellers who could show that our audience delivery vs. our rates was efficient for what the advertiser wanted.
We never tried to push the station against demos we did not perfom well in. In fact, we frequently turned down business for advertisers who were buying our #1 ratings without thiniing if our audience had any affinity with the product or service.
I mention this because raido has to work with the cleints and agencies, not against them. Working with agencies for the success of the clients is a win-win relationship... you make the agency look good, and you build relationships based on trust and confidence.
I said, "Better sellers do not get to change the demos the client requested. "
Wrong. Again, as no sales weasel has mouthed the word "wrong" to a client in 20 years... so how would you know?.
Most direct advertisers do not want to buy. Selling is a process of showing that the investment in advertising on your staitons produces results in excess of the investment... a good ROI. Selling to agencies consists of pricing at the CPP established for a campaign, or giving value added to compensate for a high CPP on the spot rate. In neither case does one argue with the customer. The objective is to help the direct account to sell, or the agency to meet cost goals. Arguing is counterproductive, and remembered long and negatively.
I personally know (admittedly maverick) marketing reps who are dying to go after clients aggressively and break their kneecaps, to sell Oldies. Because: [a] they know they're good; they know they can do it; [c] they know that, in the end, the reluctant client's gonna get results. And then, down goes another nugget of Radio folklore!.
They will be selling Ricoh copiers by the end of the year.
I siad, "Gee, according to this changing one staiton, CBS-FM, destroyed the industry"
.
Oh. You honestly don't think it was one of the contributing factors? Really??.
The industry is not being destroyed, and one station, even in NY is of no consequence in the advertising community. In many cases, large campaigns are bought without even knowing the formats of the stations... they can pretty much optimize a campaign running different combinations against reach and frequency. In LA, we still get plenty of orders for KLVE with English copy or recordings... despite being in Spanish for 30 years and being top 5 for the last 13 years. The agencies buy on the numbers, not the format.
Now... what do you say... by January 1, 2008, 50 American radio stations, minimum, flip to, or back to, some semblance of "Oldies"?.
In rated markets, and among full signal FMs, for Classic Hits, maybe 5 or 6 will switch, and that will mostly be from oldies. At most, new 60's based oldies stations might be one or two mistakes by operators in smaller rated markets who do nto get the difference between oldies and classic hits.
The only interest in Classic Hits right now is due to the PPM. Only one more market is going to be added by January 1, 2008, and that is NY. In 2008, we will add the top 10 markets, where at most, we might see an oldies staiton or two go classic hits. But no new oldies stations, and unlikely any non-oldies station trying classic hits.
It will take 3 years from 2008 to roll out the top 50 markets with the PPM. As for diary markets, we know how oldies does, and that is why so many have died or moved classic hits.
See above. When non-agency clients start seeing substantial dollars from the "non-traditional" source of those forgotten geezers, your sales reps aren't going to have to "go against" the agencies. The agencies will have religion, because their clients are going to be on the phone to them, giving them religion..
This is not happening. There is little interest in reaching 55+ due to proven and ongoing poor ROI for radio advertising against older demos. The 55+ group will not suddenly become fertile for advertising... change takes a generation, and it is not happening now.
The go-go age of post-consolidation Radio worked fine in a go-go economy. When the animals start starving to death, look out. A lot of CW will be eaten for lunch.
Actually, the economy is quite fine. The market is up for several consecutive years, Dow and NASDAQ at highs, unemployment near historic residual minimums, etc. And radio is still growing, albeit slowly (some radio sectors are up 10% to 12%, though). There is no economic doom and gloom
