There's no way it gets that far. We'll see how far the two sides take their brinksmanship before working out a settlement.
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Cumulus Sues Nielsen over Ratings Monopoly
- Thread starter RadioGuy1864
- Start date
There's no way it gets that far. We'll see how far the two sides take their brinksmanship before working out a settlement.
Just a very general, outsider-looking-in observation: perhaps this could go some (very small) distance toward reversing the terrible decline in revenues, because if stations can spend less to get the same ratings data, perhaps they can compete more effectively because they can then afford additional data that might help them.
It seems like stations and networks have been at Nielson's mercy for far too long. Yes, radio's dependence on ratings isn't new and that's just the way it works, but if radio stations feel the ratings agency they subscribe to doesn't play fair, they should hold them accountable.
c
It seems like stations and networks have been at Nielson's mercy for far too long. Yes, radio's dependence on ratings isn't new and that's just the way it works, but if radio stations feel the ratings agency they subscribe to doesn't play fair, they should hold them accountable.
c
The ad agencies pushed Arbitron to deliver radio ratings faster. That meant electronic measurement because the point of comparison by buyers was the metered TV household which could deliver "overnights"; the Arbitron diary took 12 weeks to conduct and then about a month more to deliver.
We got the PPM, and it increased the cost of ratings by about 70% in the top 50 markets.
Before the merger, we could look at Arbitron's financials as a publicly traded company. They were profitable, but not abusively. They ran a decent, efficient organization with predominantly good and talented people.
Nobody was at Arbitron's mercy. In fact, a bunch of other companies like Birch and others tried to start competing services, but the agency community was not particularly interested.
I see.
I was mainly referring to, I guess, the "PPM era" and Nielsen (here I've been spelling it wrong all night!), specifically post-Arbitron merger Nielsen, seemed to take advantage of that technology (rightfully, to an extent).
It's like the industry got a double whammy: not only were their listener numbers negatively affected by the PPM, ad revenues plummeted due to the Great Recession.
That alone does much to explain the current situation in my opinion. COVID only made a bad situation exponentially worse. It's amazing the industry has survived at all.
c
I was mainly referring to, I guess, the "PPM era" and Nielsen (here I've been spelling it wrong all night!), specifically post-Arbitron merger Nielsen, seemed to take advantage of that technology (rightfully, to an extent).
It's like the industry got a double whammy: not only were their listener numbers negatively affected by the PPM, ad revenues plummeted due to the Great Recession.
That alone does much to explain the current situation in my opinion. COVID only made a bad situation exponentially worse. It's amazing the industry has survived at all.
c
Triple whammy. Add to those two things the fact that PPM costs about 5 times as much as the diary.
Not really. The rate increase was less than 80% for most operators.
In the early 2000's testing, Nielsen became part of the project, and many of our meetings (I was an industry delegate to the Nielsen/Arbitron/Radio Industry/TV Industry meetings). They dropped out after about a year.
The real cost of the PPM was the 30% drop in AQH listening that it showed. So stations could not push rates based on lower persons using radio.
What affected radio during the pandemic was inflation. Advertisers cut bac,k.
This.
It has caused not only the advertisers to cut back, but many, if not most of the potential consumers they're advertising to!
c
K.M. Richards
Program Director, The Eighties Channel™
Well, it depends on how you calculate "more money".
There is likely to be more expense involved in the local buy. Salary and/or commission for the local account executive (in comparison to the agency just getting a commission). Was the national buy brokered through a station representative, as opposed to just being local? Then the commission rate may be different than if it was entirely handled in-house. And what is the actual difference in the commission percentages between local AE, national agency, and station sales representation firm?
Did the local AE have to make multiple trips to the client, and is the AE being reimbursed for mileage? Did there need to be a spec spot (or spots) produced first? If so, calculate in how much of the production person's salary was spent on that.
Officially, except for the requirement that political advertising gets the lowest published rate, the same rates apply whether it was an agency buy or generated in-house. But the local car dealership may decide to run more spots than the national manufacturer, and therefore qualify for a lower rate (logically enough, the more spots you commit to in the advertising contract, the better a break you get per-spot).
So there is no easy, hard and fast answer to your question, although I agree with your opinion on local ads likely targeting the audience better.
"National" rates are typically higher than the rates given to local accounts.
What ads are more effective to a client. National ads or localized ads. Paying more and not getting a return would be my question.
K.M. Richards
Program Director, The Eighties Channel™
You keep asking for simple answers to complicated questions.
The goals of national advertisers are different from those of local businesses. National advertisers are geared more toward brand awareness, including nationwide promotions to bring customers into local dealers or franchisees. To use your original example of automobiles, Lexus may run ads for their UX Hybrid model with the goal of getting potential buyers interested in seeking out their local Lexus dealer. Further examples: McDonalds may hype their breakfast menu to entice people to use the drive-thru window at their local franchise on their way to work. Vicks wants to make their NyQuil brand stick in your mind so that next time you come down with a cold you go to the pharmacy and get their product.
None of those can be quantified in the way you are expecting. The return is not directly shown to the national advertiser, but it can result in increased sales at the entry point of the customer. Lexus dealers may sell more of the SUV model I referenced, but Lexus itself cannot quantify the results because those sales are spread out across the entire country. Similarly, how does McDonalds tell if a national promotion results in more Egg McMuffins being sold when (according to various sources) there are somewhere in the neighborhood of 13,600 restaurants in the U.S.? How does Vicks tell how many additional sales of the various products in their NyQuil line are from advertising and how much is just a bad flu season where consumers buy more product because they already had positive past experiences with the brand?
See why there's no easy answer to your question?
On the other hand, most local sales are not to dealers or franchisees of a national brand. The local coffee shop that is competing with Starbucks and Coffee Bean & Tea Leaf is going to point out their uniqueness vs. the national brand. They will measure the success of a local ad in terms of customer visits. The local pharmacy isn't as concerned with selling NyQuil as they are in being your choice to have prescriptions filled and will focus on their convenience and responsiveness compared to CVS and Walgreens. Local car dealers are either going to be mostly in the used car business or will tie their image to the national brand rather than specific models.
Those local business have an entirely different metric for determining advertising success than do the national advertisers.
The best answer I can give -- and I bet you won't be satisfied, but it's likely the best you are going to get under the circumstances -- is that both national and local commercials are going to have their own type of results, and to compare one to the other is the proverbial "apples and oranges" scenario.
If the goal is a return on investment with all ad sales. Generic Geico ads will not get the engagement of say “Joes Used Auto Sales” on a station in Boise. So while the Geico ad will pay more to the station Joe’s ad will bring him more business.
K.M. Richards
Program Director, The Eighties Channel™
You are still comparing apples and oranges. The Geico ad's success is measured by a different metric that the one Joe uses for his used car lot.
If you persist in trying to justify comparisons that are not reasonable, I will not only have to stop answering you, I will probably have to put you on ignore. Is that what you want?
Radio (or TV or print or a website) is a medium between the message sender and the receiver. It's like the pipe between the reservoir and your water faucet.
A radio station has little to do with the creative of national brand advertising and, even, with local agency ads. The effectiveness has to do with the need of consumers, the effectiveness of the message and the message's proximity to the time of purchase. All of that is in the content of the ad.
Of course, a local retail ad can say, "come to US on Route 45 in East Mytown and see it" while the national ad is more generic. The local ad can even have the business owner inviting folks in.
There is no proof of that. It all depends on how many people are interested in changing insurance carriers vs. the number who want to buy or sell an older car.
Example: I would never be in the market for a pickup truck, so I pretty much ignore those ads. But if my car is aging and I want a new one, I will pay more attention to new car dealer ads. And if I have decided to buy a luxury car, I won't be paying attention to Hundai and Ford ads.
Appeal of product, effectiveness of the message and the interest of consumers. None have to do with the ad medium, but, instead, with the receptiveness towards the message by a number of consumers.
In a perfect world would a station rather have local ads or national ads. What is more pleasing to the listener. Or do they not care as long as they get paid.
K.M. Richards
Program Director, The Eighties Channel™
Two answers: Some national ads are more pleasing than others. The same applies to local ads. Part of that is, as David just said, whether the listener is in the market for the product being advertised.
And every station cares about advertising revenue. Unless someone wants to advertise something objectionable, there's no preference between national and local.
We'd all like every stopset to be filled with jingle type ads written by Steve Karmen.
There are annoying national ads, and similarly annoying local ones. And the reverse, too.
But I'd rather hear...
See? It is about the creative, not the medium.
Here is an interview with Steve... showing how a good ad can be as entertaining as the entertainment content.