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Declining radio audiences

You constantly hear about so many people living from "paycheck to paycheck". If that's true, then working people are no better off than retirees. They have no "Disposable income" for advertisers to take. In reality, there are people of all ages who likely do not respond to advertising...
 
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Kent said:
The dealerships here don't advertise on any medium like they did 15-20 years ago. They still advertise and even still advertise on radio, but they do so a lot more sparingly.
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I agree. I bought my most recent car by using Cars.com. Car dealers use radio to sell service, not as much new car sales.

The real killer right now is lack of retail in the 4th quarter. When I look back to older program logs, they were filled with Sears, Penney's, Macy's, K-Mart, WalMart, Walgreens, CVS, and other major retailers. Now there's next to nothing in that category. Just Macy's and Lowes. We all used to depend on 4th quarter Christmas sales to make up for losses during the year. That won't happen this year. That's why everybody is laying off staff.
 
Kent said:
You may have more options in larger markets, but keep in mind, also, that car dealerships are fewer than they were in before the Great Recession. They're also more heavily consolidated. Most markets had at least two times more Ford, GM, and Chrysler dealerships than they needed (some had six times more of those dealerships than they could comfortably support), and the Great Recession eliminated most of the redundant dealerships. My last radio job was eliminated when two auto dealerships that were six figure spenders with the station shut down. They didn't sell or consolidate; they just sold their inventory, locked the doors, and walked away.

I live in a small city of just over 100,000. We had two or three Ford, GM and Chrysler dealerships each. That doesn't include the two Honda dealerships, or the couple Toyota dealers, or any of the other import motor dealers. Between roughly a dozen dealerships, we had about eight unique owners. We had at least one dealership in every break, and a couple of them dropped north of $50,000/year for sponsorships of events, our weather radar, and other non-spot buys. When the Great Recession hit, we went down to one dealership for each brand. Since then, a dealership out of Little Rock has bought the bulk of the dealers in town. The result is that we went from eight unique owners to three.

That's significant because, if I was interested in a Ford, advertising your specials might get me into your dealership versus the other one in town. The other no longer exists, and the remaining Ford dealership has less incentive to advertise its specials. I have to visit them or go out of town. Also, with Ford, Nissan, Honda, Kia, and Hyundai under the same ownership (as well as Chrysler and Mercedes-Benz under a different umbrella), they're no longer competing with each other like they were 20 years ago. The dealerships here don't advertise on any medium like they did 15-20 years ago. They still advertise and even still advertise on radio, but they do so a lot more sparingly. The people in Little Rock don't care much what you buy so long as you buy from them, and, if you're set on a specific vehicle, they've got you when you walk in the door. With talk that Nissan may go bankrupt in the next three years, we might not yet have seen the bottom.
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I was thinking more manufacturer advertising than dealer, but you're right---there's a lot more radio and TV done by dealers than by the manufacturers these days.

The trouble is, the vast majority of them are so loud and aggressive that I couldn't tell you if they're telling me about a car I'd be interested in or not.

The successful model for dealership advertising, tragically, is aimed at people who are right-now-desperate for a car. Has been that way for 20 years. It's dealerships trying to hit their number.
 
tbolt909 said:
You constantly hear about so people living from "paycheck to paycheck". If that's true, then working people are no better off than retirees. They have no "Disposable income" for advertisers to take.
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You tend to make very black or white assessments. And you can't possibly believe that they're true. There are people who are very poor, people who are very wealthy and a very wide spectrum of folks who are in some sort of middle.

Even those in the same economic group vary widely based on their own personal spending and saving habits.

Specifics help. This post from just last month puts the percentage of American households that make less than $50,000 who are living "paycheck to paycheck" at 35%...which would mean 65% are not.


It also says that among households making more than $150,000, 20% are living "paycheck to paycheck", which means 80% are not.

tbolt909 said:
In reality, there are people of all ages who likely do not respond to advertising...
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That is true.
 
tbolt909 said:
Without quoting Michael's lengthy post-- The demos that advertisers want don't have any more money than retirees.
They rack up bills and huge credit card debt. Sure, maybe younger folks aren't savvy and cave in to impulse buying.
I guess advertisers count on that so they are easy prey.
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No, they are the people willing to try new brands and products and services.
tbolt909 said:
Older demos are still consumers until they die. Many are still active. They travel, dine, shop, etc.. Many merchants are happy to get their business. Pharmaceutical companies certainly must think old folks respond to advertising because the airwaves are filled with ads pushing all kinds of drugs promising a Fountain of Youth...
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When advertisers target older people is almost always when their product or service is only of interest to seniors. If you start getting arthritis at 60, you are interested in relief-giving products. But not before. And so, that category is fresh, with no brand preferences.

But changing a person's 30-year favorite toothpaste brand is a lot harder because you have to overcome habit and loyalty-
 
gr8oldies said:
As for car-buying, the profit on that car is largely going to be in selling the financing, rust-proofing, extended warranties, etc. If a senior plunks down cash, there goes that.
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Interestingly, I got into a business discussion with the manager when I bought my last car. The guy had grown up in the same neighborhood I lived in for a while in Mexico City, so we had kind of a bond and he told me some interesting things.

I asked why there was so little negotiating room on the sticker price and he said that over 90% of their customers bought cash and that they had very specific specifications on the car they wanted. They were not attracted to odd warranty extensions, accidental glass replacement and the like, so no high margin add-ons.

Thus, the price was fixed. They threw in a cool Porsche sports jacket at no cost, but nothing else. They could not afford to.

And they don't buy local advertising. At all.
 
michael hagerty said:
I was thinking more manufacturer advertising than dealer, but you're right---there's a lot more radio and TV done by dealers than by the manufacturers these days.

The trouble is, the vast majority of them are so loud and aggressive that I couldn't tell you if they're telling me about a car I'd be interested in or not.

The successful model for dealership advertising, tragically, is aimed at people who are right-now-desperate for a car. Has been that way for 20 years. It's dealerships trying to hit their number.
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Car dealerships have always made more money on selling parts, service, financing. Their profit margin was always higher on selling a used car. Any discount on a new car came from the manufacturer. Dealers need to move inventory off the lot.

Buying a car is considered to be the 2nd biggest purchase in a persons life (House is first). It shouldn't be made in haste. A dealer will always try to sell you what's on their lot, whether it's what the customer wants or not. Some are willing to do a dealer trade to get the car the customer wants. Car dealership ads on Radio have always been absurd and a tune out. Especially, the ones with the unintelligible sped up reading of the legalese and VIN numbers at the end...
 
michael hagerty said:
Here's the problem, Tom:

Let's agree to the discretionary income and personal wealth , though I know a lot of people who have a chunk of money but live like all they have is their Social Security check because they might surprise themselves and live to 100.

And I know a lot more with modest savings who ARE living on their Social Security check. The national average SS check is $1,904 a month. The absolute max---someone who averaged a six-figure salary for the past 35 years---is $3,800 a month (that bumps up to $4,873 if that person waited until age 70 to start collecting the benefit).

Let's assume that you and I are in that lucky first group, doing well and willing to splurge here and there. In other words, we're not going to stop going out to dinner, traveling domestically and abroad and we're not gonna die driving the car we bought when we were 60.

Okay.

When was the last time seeing a car advertisement prompted you to take an action that ended in you making a purchase of any car---much less that car?

What sort of advertising would a restaurant have to do to get you to go there?

So much of both of those categories are word of mouth and research---friends and reviews in the case of cars, friends, Yelp! and the county health department restaurant reports in the case of restaurants.

And why do we do those things? Because we've lived a while and are no longer easily persuadable by advertising. The last car I bought that got on my radar via advertising was when I was 19. That taught me.

Now, travel...that's an opportunity. A well-produced TV spot showing me some fabulous place I've never been or haven't been in a while could get me thinking about packing a suitcase.

It's gonna be pretty close to impossible, though, to get me to change my favorite airline or car rental company or hotel chain. A bad experience with either of those can screw up an otherwise wonderful vacation. So it's probably tourism bureaus that are producing that commercial and buying that time.

And then you have the question---how many people over 55 with substantial amounts of personal wealth are listening to over-the-air commercial radio and watching commercial TV?

Just because both mediums are on their way to having only a top-heavy demographic pool from which to fish doesn't mean the big fish (financially) are in that pool.

I'm 68. My wife is 61. I can count on one hand the number of broadcast TV shows we watch (usually via DVR so we can skip the commercials). The rest is streaming and has been for the better part of a decade. Same with radio---non-comm classical/jazz and my own library. Apart from that, very little commercial radio listening.

So most of the advertising is never going to reach me. And I'm not even number 999,999 on the list of the world's one million most tech-friendly seniors.
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Thank you for the very well-reasoned answer.

And I can't disagree with any of it -- my partner and I are about the same ages as you and your wife, and some of what you comment is consistent with our own decisions.

As it turns out, I just bought a new car and my purchase decision was largely driven by reading automotive news, hearing about a new model that was coming out a couple years ago, reading reviews and customer opinions, and finally making the purchase after it had been on the market for a couple years. My partner's vehicle was purchased through much the same process. So advertising didn't really figure in either purchase (and, in fact, I'm not sure I've ever seen an advertisement for either of our vehicles).

From the sounds of it, I do watch more broadcast TV than you do -- but always via DVR to skip past commercials. It is rare that a commercial will catch my attention enough to make me stop scanning and watch it. That's a long time habit for me, because I pretty much quit watching live TV after I bought my first S-VHS VCR in the late eighties -- it was just more convenient to watch playbacks and scan through commercials, and the picture and sound quality of S-VHS Hi-Fi was such that I wasn't giving up much versus the live broadcast.

But it does seem like a huge problem for broadcasters, because if they can't find a way to monetize the audience they have, then they won't have a business. And right now, the broadcast audience seems to be aging rapidly.
 
TexasTom said:
But it does seem like a huge problem for broadcasters, because if they can't find a way to monetize the audience they have, then they won't have a business. And right now, the broadcast audience seems to be aging rapidly.
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Which is why they're moving their content to platforms where they CAN monetize them, which is away from Nielsen measured media.

Because the only method of monetization in broadcast is advertising, and that is dependent on the whims of advertisers, not the users of the content.
 
exbloguero said:
Now I understand why so many American adults are living in tourist areas in Mexico, all along the Pacific coast.
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I've known a number of retirees whom have moved to Thailand and Philippines.

In some cases, they have married persons from these countries and moved there because of the local national's family ties.

Granted, a not-so-small segment of retirees to these countries don't involve married people, but single, typically men, whom may find their lifestyle needs are far better met in these lower cost countries.
 
RadioFan2J3 said:
I've known a number of retirees whom have moved to Thailand and Philippines.

In some cases, they have married persons from these countries and moved there because of the local national's family ties.

Granted, a not-so-small segment of retirees to these countries don't involve married people, but single, typically men, whom may find their lifestyle needs are far better met in these lower cost countries.
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"One Night in Bangkok....."
 
vchimpanzee said:
I think it was listening to Casey Kasem where I found out the writer of the lyrics was just writing nonsense to go along with the music, but those lyrics were never replaced.
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The song is from the Benny Andersson and Björn Ulvaeus musical "Chess",with lyrics by Bjorn and Tim Rice, who worked with Andrew Lloyd Webber. Ulvaeus did write "dummy lyrics", but when Rice began working to refine them, he found that they actually told the story of the American chess grandmaster touring the world and the next stop is Bangkok. He decided to keep them.
 
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