Debunking the "radio is dead" theory.

[davideduardo]

Here is an item from Inside Radio in this afternoon's update e-mail.

"More good news for radio from the Fall Arbitron.
The PUR (Persons Using Radio) level was up slightly, from a 14.2 in the Summer to a 14.3. That's off from the Fall 2004 14.5 - but a nice stabilization from the all-time low of Summer. The 25-54 number was also positive - a 15.4, up from the Summer 15.2. "

Full data from Arbitron is at http://wargod.arbitron.com/scripts/ndb/ndbradio2.asp

 

[SaltyDog]

Useful link

Very useful link. Thanks.



> Here is an item from Inside Radio in this afternoon's update
> e-mail.
>
> "More good news for radio from the Fall Arbitron.
> The PUR (Persons Using Radio) level was up slightly, from a
> 14.2 in the Summer to a 14.3. That's off from the Fall 2004
> 14.5 - but a nice stabilization from the all-time low of
> Summer. The 25-54 number was also positive - a 15.4, up from
> the Summer 15.2. "
>
> Full data from Arbitron is at
> http://wargod.arbitron.com/scripts/ndb/ndbradio2.asp
> <P ID="signature">______________
SD</P>

 

[davideduardo]

Re: Useful link

> Very useful link. Thanks.

It is worth pointing out that the late 80's had the highest levels of radio listening of the last 4 decades. The norm is more akin to what we see today, except that radio no longer serves 55+ and 12-17, so the levels of listening there are lower than historic levels.

 

[SaltyDog]

Re: Useful link

Interesting. I still think that because of technology, there might well be a real long term downward trend in terrestial radio listening. That doesn't necessarily mean that I think there it is presently occurring to any great degree.

As I've said before and I'll continue to say, I think that anyone who is a top notch programmer or air personality has a bright future. Not so the marginal programmer or marginal air personality.

I also think that the most wrenching changes will be seen on the sales side. The high transaction costs of national advertising will be reduced greatly by electronic buying and selling. Just look at what dMarc is accomplishing. Google sees what they see and they bought the company.

> It is worth pointing out that the late 80's had the highest
> levels of radio listening of the last 4 decades. The norm is
> more akin to what we see today, except that radio no longer
> serves 55+ and 12-17, so the levels of listening there are
> lower than historic levels.
> <P ID="signature">______________
SD</P>

 

[11south]

Re: Useful link

>
> I also think that the most wrenching changes will be seen on
> the sales side. The high transaction costs of national
> advertising will be reduced greatly by electronic buying and
> selling. Just look at what dMarc is accomplishing. Google
> sees what they see and they bought the company.
>

How does Dmarc work? They get some spots via barter. They buy unsold spots at low rates. When they start getting into a station's wallet, doesn't the station un-affiliate? When the local car dealer finds out he/she can buy spots via google and dmarc for less than from the local sales rep at the station...won't the station kick Dmarc to the curb?

Additionally, won't the program directors tire of having all the stop sets filled to the max...with cheap spots for Sears Cabinet Refacing, or Midwest Center for Stress and Anxiety? Seems it would be better to play another song. From a technical stand point, won't programmers have to insert PSA's in all unsold inventory so Dmarc can see the unsold spots? If there are no spots to cover the market..will the station air the PSA's as filler. I thought less is more...

 

[thebroker]

Re: Useful link

> As I've said before and I'll continue to say, I think that
> anyone who is a top notch programmer or air personality has
> a bright future. Not so the marginal programmer or marginal
> air personality.


Great point. And couldn't radio stand to get rid of a few of the less-than-mediochre programmers and operators?

 

[davideduardo]

Re: Useful link

> >
> > I also think that the most wrenching changes will be seen
> on
> > the sales side. The high transaction costs of national
> > advertising will be reduced greatly by electronic buying
> and
> > selling. Just look at what dMarc is accomplishing. Google
> > sees what they see and they bought the company.
> >
>
> How does Dmarc work? They get some spots via barter. They
> buy unsold spots at low rates. When they start getting into
> a station's wallet, doesn't the station un-affiliate? When
> the local car dealer finds out he/she can buy spots via
> google and dmarc for less than from the local sales rep at
> the station...won't the station kick Dmarc to the curb?

They think they can fill unsold inventory at a deep discount, like expedia.com does. Of ocurse, this violates nearly every rep firm contract...
>
> Additionally, won't the program directors tire of having all
> the stop sets filled to the max...with cheap spots for Sears
> Cabinet Refacing, or Midwest Center for Stress and Anxiety?

PDs do not set commercial policy or rates. The better ones are part of the policy, but this is a management function.

 

[thebroker]

Re: Useful link

David, I'm certain that you know more than me about this, but isn't there a clause in the station's contract with dMarc which prohibits dMarc from selling directly to local advertisers? This would mean that even in the rare chance the local car dealer did in fact find out about the situation, he couldn't buy from dMarc. But, he'd beat you up when you renegotiated his buy. Seriously though, what are the chances of a local advertiser finding out? Slim to none. Plus, I'm sure all dMarc spots can be preempted, so there's no way they can guarantee inventory probably.

But just imagine how steamed InterRep and Katz will be when Google starts selling to Home Depot and McDonalds...

 

[Nate Wesley]

> Here is an item from Inside Radio in this afternoon's update
> e-mail.
>
> "More good news for radio from the Fall Arbitron.
> The PUR (Persons Using Radio) level was up slightly, from a
> 14.2 in the Summer to a 14.3. That's off from the Fall 2004
> 14.5 - but a nice stabilization from the all-time low of
> Summer. The 25-54 number was also positive - a 15.4, up from
> the Summer 15.2. "
>
> Full data from Arbitron is at
> http://wargod.arbitron.com/scripts/ndb/ndbradio2.asp
>
Not to challenge the findings for spite, but couldn't this be an example of 'wobble' (as you mentioned on another forum)--or would this involve an entirely different set of data?<P ID="signature">______________
"We know now there were no weapons of mass destruction over there. But Coretta knew and we knew that there are weapons of misdirection right down here." --Rev. Joeseph Lowery, patriot</P>

 

[davideduardo]

> >
> Not to challenge the findings for spite, but couldn't this
> be an example of 'wobble' (as you mentioned on another
> forum)--or would this involve an entirely different set of
> data?

Sure, there is wobble. But data based on hundreds of thousands of diaries, as a full book across the country is, would be subject to very, very minimal error. changes, for the most part, are real with a sample this size.
>

 

[SaltyDog]

Electronic Ad Buying

I don't know how much David knows about dMarc's Revenue Suite but I've seen this work and it's pretty slick.

I have a couple of observations. Unless contracts have changed a lot, stations violate the rep agreement with every direct piece of business we take from out of the market. It happens all the time and everyone knows it.

I don't think there is any short term impact on local business, but how about national? We are stuck in the 80's. Here' the process:

Buyer ----> inputs order ------> Rep Firm ------> Sales assistant reenters order into proprietary software-----> Faxes order to NSM at station -----> NSM passes order to Traffic Manager--- Traffic Manager reenters order into stations software package.

dMarc: Buyer places order with dMarc in coordination with traffic manager. Spot is sent via the Internet and plays in prearranged carts. Client logs onto control panel console and can sees when spots air. Gets affidavit untouched by human hands.

And beyond what this software is doing now, it's capable of eliminating layers of redundant human beings and taking a huge slice out of transaction costs.

Right now it might be used to sell un-used inventory at low rates. But tomorrow it might sell prime inventory at higher rates. The camel's nose is under the tent.<P ID="signature">______________
SD</P>

 

[davideduardo]

Re: Useful link

> David, I'm certain that you know more than me about this,
> but isn't there a clause in the station's contract with
> dMarc which prohibits dMarc from selling directly to local
> advertisers? This would mean that even in the rare chance
> the local car dealer did in fact find out about the
> situation, he couldn't buy from dMarc. But, he'd beat you up
> when you renegotiated his buy. Seriously though, what are
> the chances of a local advertiser finding out? Slim to none.
> Plus, I'm sure all dMarc spots can be preempted, so there's
> no way they can guarantee inventory probably.

I think the whole model changes with the Google purchase. The PR pieces talk about multi platform sales, etc. Some has got to be puffery, but part is real.

The idea is to have reach in markets across the US. These are "open avial" standing orders, and are medium-based buys rather than station based buys. To me, the real issue is that it converts radio into a commodity, not a targeted medium bought strategically.

On the other hand, this is very much like the way Metro Traffic sells... bulk on a dozen or so stations, with shotgun coverage at low cost.
>
> But just imagine how steamed InterRep and Katz will be when
> Google starts selling to Home Depot and McDonalds...

It violates existing rep contracts. In essence, these companies are selling tonnage, and not stations.
>