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Explained: Why Standards is not good business

J

job

Guest
This article in the NY Daily News offers the best explanation I've seen. Sorry, I love the music, too. I listen to it on satellite radio and I listen online. But if it were my radio station and my money invested in it, I'd drop Standards, too.

_______________
f you wonder why radio formats like oldies and adult standards disappear even though they have large numbers of listeners, the main reason is simple.

Radio owners measure success less by listenership than by ad revenue, and if a big audience doesn't translate to big ad dollars, the format may be expendable.

That harsh truth is reflected in a new national survey by Miller Kaplan (MK) on radio's 2005 "Power Ratios" - how various formats convert listeners into ad dollars.

A "power ratio" of 1.0 means a format breaks even. It has, say, 5% of the audience and makes 5% of the revenue.

Below a 1.0 is not good. Adult standards, for instance, have 2.45% of the audience in the MK survey, but only 1.08% of the ad dollars, for a dismal "power ratio" of 0.44.

In other words, a station programming adult standards might well see a chance to make more money somewhere else.

http://www.nydailynews.com/entertainment/ent_radio/story/401463p-340065c.html

_______________________________
 
> Below a 1.0 is not good. Adult standards, for instance, have
> 2.45% of the audience in the MK survey, but only 1.08% of
> the ad dollars, for a dismal "power ratio" of 0.44.
>
> In other words, a station programming adult standards might
> well see a chance to make more money somewhere else.


Two things surprised me. First, that urban formats also have a power ratio below 1.0. Secondly, that sports are so high with a 1.44. I know of two recent examples of adult standards switching to sports... with decent ratings that completely tanked after the switch. Is the advertising demographic for a sports station really that profitable that negligible ratings don't mean anything?
 
> Two things surprised me. First, that urban formats also
> have a power ratio below 1.0. Secondly, that sports are so
> high with a 1.44. I know of two recent examples of adult
> standards switching to sports... with decent ratings that
> completely tanked after the switch. Is the advertising
> demographic for a sports station really that profitable that
> negligible ratings don't mean anything?
>

I'm afraid it's true, Bluehen. In the case of a sports format, it's all about capturing the "elusive male" audience, and about ad agency buyers (many of whom are in their 20's) who place ad buys on sports stations because it's "the right audience" for some of their clients.

As for local ad sales, most advertisers perceive that the sports audience is younger and more desireable than the "older" listeners who prefer adult standards or oldies.

A wise radio sage once told me that it's not about the size
of the audience, it's about the age (and sometimes the gender) of the listeners that matters most when it comes to ad sales. And after all, the truth is that radio is really about the ad revenue, nothing more, nothing less.

Sadly, the advertiser's focus on "youth" is why adult standards radio stations across the country are an endangered species.
 
> I'm afraid it's true, Bluehen. In the case of a sports
> format, it's all about capturing the "elusive male"
> audience, and about ad agency buyers (many of whom are in
> their 20's) who place ad buys on sports stations because
> it's "the right audience" for some of their clients.
>
> As for local ad sales, most advertisers perceive that the
> sports audience is younger and more desireable than the
> "older" listeners who prefer adult standards or oldies.
>
> A wise radio sage once told me that it's not about the size
> of the audience, it's about the age (and sometimes the
> gender) of the listeners that matters most when it comes to
> ad sales. And after all, the truth is that radio is really
> about the ad revenue, nothing more, nothing less.
>
> Sadly, the advertiser's focus on "youth" is why adult
> standards radio stations across the country are an
> endangered species.


Jeez, remember 20 or 30 years ago when the desired audience might have been the higher income executive who listened to classical or beautiful music? Now that's the group I'd like to target... not necessarily with classical or beautiful music, but a combination with soft vocal hits (Barry Manilow, Michael Buble) to also get all those Mom's in their 30s & 40s. This is where I would think most of the disposable income is, but what do I know?
 
> > Sadly, the advertiser's focus on "youth" is why adult
> > standards radio stations across the country are an
> > endangered species.

It is sad. If you look at the Oldies Message Board, you'll find similar laments on the demise of that format with explanations from industry insiders. If 49+ is such an "undesirable" market segment, then exactly who is buying Barry Manilow's latest 50's CD? It debuted at #1 on the Billboard Album charts last month and his version of "Unchained Melody" recently began receiving airplay on Lite-FM. Although he's being exposed to a new generation of listeners via his appearance on American Idol, I'm betting it's the higher end of the listener pool that are buying the CD.

That's not an aberration. The early "Baby Boomers" are now reaching retirement age. The thought within the ad community that "55 is fatal" is a missed "Golden" opportunity. There's still plenty of disposable income among that market segment, but advertising agencies (likely being run by people under 49), are refusing to recognize the potential of that group as a viable source of ad dollars.
 
I think part of the arguement is not just necessarily that people 55 and over don't spend money. Obviously they do. More than young people in some instances. It also has to do with mindset. Someone in the biz once told me that people 55 and over are "set in their ways" so to speak. They like their Buicks. They like their GE refrigerators. They like their Toro lawnmowers. They like their Maytag washers. Ads won't change their mind. The younger crowed, however, is much more open to being influenced by advertising.

I'm not saying I believe any of this. I just wanted to put a new wrinkle into the conversation. <P ID="signature">______________

http://weatherwindow.blogspot.com</P>
 
And the Hits Just Keep On Coming

> > > Sadly, the advertiser's focus on "youth" is why adult
> > > standards radio stations across the country are an
> > > endangered species.
>
> It is sad. If you look at the Oldies Message Board, you'll
> find similar laments on the demise of that format with
> explanations from industry insiders. If 49+ is such an
> "undesirable" market segment, then exactly who is buying
> Barry Manilow's latest 50's CD? It debuted at #1 on the
> Billboard Album charts last month and his version of
> "Unchained Melody" recently began receiving airplay on
> Lite-FM. Although he's being exposed to a new generation of
> listeners via his appearance on American Idol, I'm betting
> it's the higher end of the listener pool that are buying the
> CD.
>
> That's not an aberration. The early "Baby Boomers" are now
> reaching retirement age. The thought within the ad
> community that "55 is fatal" is a missed "Golden"
> opportunity. There's still plenty of disposable income
> among that market segment, but advertising agencies (likely
> being run by people under 49), are refusing to recognize the
> potential of that group as a viable source of ad dollars.
>
Stop blaming the ad agencies!!! They answer to the advertisers!!!!
Stop blaming the ad agencies!!! They answer to the advertisers!!!!
Stop blaming the ad agencies!!! They answer to the advertisers!!!!

Sorry to repeat Fang, I'm on your side re. the music, but this is reality... and you should know by now after visiting the oldies board that the ADVERTISERS are the ones who TELL the ad agencies what demos they want to buy!!
So it doesn't matter that the agencies may be run by ppl under the age of 49, their clients, the ADVERTISERS dictate the buys even if those ADVERTISERS (owners/CEOs) are 60 years of age or over!<P ID="edit"><FONT class="small">Edited by SuperRadioFan on 03/22/06 07:03 PM.</FONT></P>
 
Re: And the Hits Just Keep On Coming

> Sorry to repeat Fang, I'm on your side re. the music, but
> this is reality... and you should know by now after visiting
> the oldies board that the ADVERTISERS are the ones who TELL
> the ad agencies what demos they want to buy!!
> So it doesn't matter that the agencies may be run by ppl
> under the age of 49, their clients, the ADVERTISERS dictate
> the buys even if those ADVERTISERS (owners/CEOs) are 60
> years of age or over!
>

Hello!

Standards can be a very tough sell. There's no question about it.

In my own experience, there are two things that I have to contend with.

One (which I have no explanation for) is the advertiser who is a P1 to my Standards station and has it on in his shop, but won't spend a dime on it...instead putting all his money in the other stations in the cluster! A couple of years ago when my station was switched to "Hot Talk/Sports," one of these guys was so incensed, he threatened to yank his ad money off ALL of our stations! The Standards came back a year later, and he has since bought time with me erratically. What exactly does it say when he is so fiercely loyal to the format as a listener, and makes his customers and workers listen to it, but doesn't seem to believe in it as an advertising medium? I'm still scratching my head about that one.

The other is the definition of "Standards." I don't want to open that Pandora's box on this board again, but you would be amazed how many times I'm asked, "Oh, you play Lawrence Welk!" Um, no...we don't. Not that there's anything wrong with LW, but the only song of his we've played in recent memory was "Calcutta," and that was dropped years ago.

Why is "Lawrence Welk" suddenly synonymous with "Standards"?? The fact that I've recently been confronted with that *repeatedly* is all the more puzzling.

Well, I've taken that to heart and we're rewriting Station Profiles and redoing audio demos that reps can take with them, and I'm hoping that should clear the LW misconception up.

I'm sure everyone has his/her own peculiar challenges in this format, and I know they can be overcome with patience and a desire to educate. (I'd love to hear others' war stories!)

{Just for the record, remembering that I cannot quote exact numbers, my 12+ AQH share in the Fall 2005 book is exactly 900% higher than it was when we were Hot Talk/Sports!}

Y'know, the whole music world is going all higgledy-piggledy. 20-somethings are falling in love with The Beatles, Simon and Garfunkel, and Classic Rock. 30-something females are going for Rhythmic CHR. The generation gap between Oldies and Standards is dissolving daily. Who knew?

Regards,
Ken Clark
BIG WRIG 1390
www.bigwrig.com
 
Re: And the Hits Just Keep On Coming

> Sorry to repeat Fang, I'm on your side re. the music, but
> this is reality... and you should know by now after visiting
> the oldies board that the ADVERTISERS are the ones who TELL
> the ad agencies what demos they want to buy!!
> So it doesn't matter that the agencies may be run by ppl
> under the age of 49, their clients, the ADVERTISERS dictate
> the buys even if those ADVERTISERS (owners/CEOs) are 60
> years of age or over!

Okay, fine...it's the Advertisers that are refusing the recognize the 50+ market as viable. They're the one's missing the boat. Obvious product categories like Luxury Automobiles, Retirement Planning and Insurance appeal to that market. But, so do general "quality of life" ads. Things like Restaurants, Health and Beauty Aids and Home Improvement. Little by little, I'm noticing some TV ads that reflect this. Like I said, it's a "Golden" opporunity for advertisers to sell their products to a market that conventional thinking has deemed unsuitable.
 
Re: And the Hits Just Keep On Coming

> What exactly does it say when he is so
> fiercely loyal to the format as a listener, and makes his
> customers and workers listen to it, but doesn't seem to
> believe in it as an advertising medium? I'm still
> scratching my head about that one.

Well, it’s only a guess, but maybe he (and others in a similar position) believes the format works as a medium for background listening only, and no one pays attention to the advertisements. Then, of course, the argument can be made that the blame for that rests with the ads themselves. Who knows?

> The other is the definition of "Standards."
> Well, I've taken that to heart and we're rewriting Station
> Profiles and redoing audio demos that reps can take with
> them, and I'm hoping that should clear the LW misconception
> up.
>
> I'm sure everyone has his/her own peculiar challenges in
> this format, and I know they can be overcome with patience
> and a desire to educate. (I'd love to hear others' war
> stories!)

Yes, this has indeed come up before. The term ‘standards’ doesn’t exactly project an image worth getting excited over. On the contrary, the connotation is worn, tired-out, and stodgy. I know of two excellent easy-listening stations that seem to have gotten it right: WEZV in Myrtle Beach and WZRU in Roanoke Rapids NC. They both seem to emphasize the ‘easy’ and ‘relaxing’ elements of the music. In fact, I just heard the female voice-over on WZRU say something like “Your station for relaxing easy favorites… and the Great American Songbook.” Another one was “…a refreshing musical escape.”

I like how they’ve chosen to drop references to ‘standards,’ which seems to automatically attach an element of age to the music… and the kiss of death from advertisers. Instead, they’re characterizing the quality of the music they play, and not how old we’re supposed to be to listen to it.
 
Re: And the Hits Just Keep On Coming

> Well, it’s only a guess, but maybe he (and others in a
> similar position) believes the format works as a medium for
> background listening only, and no one pays attention to the
> advertisements. Then, of course, the argument can be made
> that the blame for that rests with the ads themselves. Who
> knows?

You have a point about the ads. It extends to the overall production values of the station as well. Many years ago I ran a format that used what was called "Beautiful Music" but the other-than-music content was totally non-traditional. There was a lot of promotion; even big-buck prizes contests but produced so as to grab attention by WHAT was being said and the "HOW" it was being said was intentionally quirky but never loud or obnoxious. A pretty tricky thing to do. Most commercials were carefully crafted to do that same thing and some became a sort of mini-series which listeners actually listened FOR. Hefty production cost, though, and spots were never allowed to get stale. This caused problems with some advertisers who felt that a "good" commercial lasts forever.

Oh yes, a lot of the promotional material was tongue in cheek and made fun of current politics and events, some so intentionally overblown that it became a parody of other BM stations. Obvious that nobody was allowed to take themselves too seriously.

In time the format faded but it outlasted all others of the genre in the market. Makes me wonder if somebody put that much work into doing a "standards" format whether it might work. I doubt BM will ever come back unless Mantovani returns from the dead and starts doing orchestrations of more current stuff. I'm not betting on it...though once, in walking through the English cemetary where he is buried, I whistled a particularly bad version of "Charmaine" in hopes of irritating his ghost sufficiently as to bring him forth. Forlorn hope, was it.<P ID="signature">______________
When you're done impeaching the prez, keep on going; recall every member of congress and lock 'em up! Let's try NO govt. for a while.</P>
 
Most people don't realize it's not the advertising buyer, who's usually a 20's female working in an advertising agency, who decides which stations to buy.

In every ad agency there are are Account Planners and Account Executives as well as ad buyers. The AE's work directly with the client (the advertiser) and the Planner's job is to analyze the client's stated target customer (demographics, sex, psychographics, lifestyle, income ranges, etc.) and come up with a media plan that includes which formats (or stations) to buy.

It is then the buyer's job to take the media plan, and call the various radio and/or TV stations, billboard companies, direct mail firms, etc. the planner selected for the account's ad plan. The buyer's job is to simply negotiate the lowest ad rates as they can get. The buyer's do NOT pick the stations/specific media.

By the way...most media planners are in their 40's or 50's...not 20's.

FYI.
 
Re: And the Hits Just Keep On Coming

> You have a point about the ads. It extends to the overall
> production values of the station as well. Many years ago I
> ran a format that used what was called "Beautiful Music" but
> the other-than-music content was totally non-traditional.
> There was a lot of promotion; even big-buck prizes contests
> but produced so as to grab attention by WHAT was being said
> and the "HOW" it was being said was intentionally quirky but
> never loud or obnoxious. A pretty tricky thing to do. Most
> commercials were carefully crafted to do that same thing and
> some became a sort of mini-series which listeners actually
> listened FOR. Hefty production cost, though, and spots were
> never allowed to get stale. This caused problems with some
> advertisers who felt that a "good" commercial lasts forever.

Reminds me of those old Molson Golden Ale commercials from, maybe, 15 years ago. The same male and female voices were featured in all of them, but they were involved in different situations. You got to recognize that couple's voices as though they were your good friends. They were enjoyable to listen to... very much UNLIKE the recent string of Geico and OnStar commercials. I don't know if they're intentionally obnoxious, but, if I'm in my car, I have to turn the station as soon as they come on.

> Makes me wonder if somebody put that
> much work into doing a "standards" format whether it might
> work.

Hard to say, but if I'm scanning the dial, I'd stop on it simply because it would get my attention by being something completely different from everything else on the air today.
 
Re: And the Hits Just Keep On Coming

> Most
> commercials were carefully crafted to do that same thing and
> some became a sort of mini-series which listeners actually
> listened FOR. Hefty production cost, though, and spots were
> never allowed to get stale. This caused problems with some
> advertisers who felt that a "good" commercial lasts forever.

This problem exists in all formats, especially non-corporate stations in small markets. Clients running the same spot for years and years because they "like the way it sounds" (often client-voiced/written script-over-bed). Never mind that potential customers have tuned it out long ago.
 
Re: And the /Very impressed

> > > > Sadly, the advertiser's focus on "youth" is why adult
> > > > standards radio stations across the country are an
> > > > endangered species.
> >
> > It is sad. If you look at the Oldies Message Board,
> you'll
> > find similar laments on the demise of that format with
> > explanations from industry insiders. If 49+ is such an
> > "undesirable" market segment, then exactly who is buying
> > Barry Manilow's latest 50's CD? It debuted at #1 on the
> > Billboard Album charts last month and his version of
> > "Unchained Melody" recently began receiving airplay on
> > Lite-FM. Although he's being exposed to a new generation
> of
> > listeners via his appearance on American Idol, I'm betting
>
> > it's the higher end of the listener pool that are buying
> the
> > CD.
> >
> > That's not an aberration. The early "Baby Boomers" are
> now
> > reaching retirement age. The thought within the ad
> > community that "55 is fatal" is a missed "Golden"
> > opportunity. There's still plenty of disposable income
> > among that market segment, but advertising agencies
> (likely
> > being run by people under 49), are refusing to recognize
> the
> > potential of that group as a viable source of ad dollars.
> >
> Stop blaming the ad agencies!!! They answer to the
> advertisers!!!!
> Stop blaming the ad agencies!!! They answer to the
> advertisers!!!!
> Stop blaming the ad agencies!!! They answer to the
> advertisers!!!!
>
> Sorry to repeat Fang, I'm on your side re. the music, but
> this is reality... and you should know by now after visiting
> the oldies board that the ADVERTISERS are the ones who TELL
> the ad agencies what demos they want to buy!!
> So it doesn't matter that the agencies may be run by ppl
> under the age of 49, their clients, the ADVERTISERS dictate
> the buys even if those ADVERTISERS (owners/CEOs) are 60
> years of age or over!

-------

Gosh all you guys are so sharp. I'm very impressed.


>
 
> I think part of the arguement is not just necessarily that
> people 55 and over don't spend money. Obviously they do.
> More than young people in some instances. It also has to do
> with mindset. Someone in the biz once told me that people 55
> and over are "set in their ways" so to speak. They like
> their Buicks. They like their GE refrigerators. They like
> their Toro lawnmowers. They like their Maytag washers. Ads
> won't change their mind. The younger crowed, however, is
> much more open to being influenced by advertising.
>
> I'm not saying I believe any of this. I just wanted to put a
> new wrinkle into the conversation.

Problem with this thinking is that Buicks are no longer being made, Maytag has been bought out by another company. Things that we bought when we were kids are not being made anymore. Do we stop driving because they don't make Buicks anymore. I am typing this on a computer and not an Underwood typewriter and I don't own a Toro, but a lawnmower from Wal-Mart. Kids are listening to music on their IPods avoiding the commercials from commercial radio. It's the advertisers who won't change their minds, rather than the seniors.
>
 
> Problem with this thinking is that Buicks are no longer
> being made, Maytag has been bought out by another company.
> Things that we bought when we were kids are not being made
> anymore. Do we stop driving because they don't make Buicks
> anymore. I am typing this on a computer and not an
> Underwood typewriter and I don't own a Toro, but a lawnmower
> from Wal-Mart. Kids are listening to music on their IPods
> avoiding the commercials from commercial radio. It's the
> advertisers who won't change their minds, rather than the
> seniors.


Excellent post!
 
Really?

> Problem with this thinking is that Buicks are no longer
> being made,

Really? I know GM discontinued Oldsmobile but they're still advertising
hell out of Buicks on TV and radio and, indeed, have introduced several
new models for 2006. Did I miss something?

> Maytag has been bought out by another company.

Whirlpool tried to buy out Maytag in the last few weeks but the Federal
Trade Commisson shot that down. Or did I miss something? Did someone
else come along to buy Maytag?

BTW, I'm over 60 but, having repair some near-new Maytag appliances (major)
for a younr friend, I wouldn't spend any money with them. Not after the
materials and workmanship I observed in their stoves and refrigerators. True,
I haven't seen anything horrible with their washers...so maybe it's just a case
of their failing to stick to their knitting?

> Things that we bought when we were kids are not being made
> anymore.

OK, I can't buy a new Firestone (brand) radio anymore but that has more
to do with Firestone having sold out to a Japanese tire company decades
ago. I'm about to buy a new radio but not an overpriced Bose. Should
I abandon the effort because radios are not being made anymore?

> Do we stop driving because they don't make Buicks
> anymore.

Never owned a Buick; never wanted one. When I buy a new car next week
it will more likely be a Ford Escape. But who I buy it from will not
be influenced by radio advertising 'cause I don't listen to radio much
these days, there being no programming that interests me at my age.
Probably will be influenced by print advertising.

> I am typing this on a computer.....

As am I. Likely will by a new computer when I settle in the new house/
new city in the next few weeks and it'll almost surely will be from
Apple. The young people's brand...but not influenced by an advertising
on radio (see above)

> It's the
> advertisers who won't change their minds, rather than the
> seniors.

You got that right. And this senior, along with several others I
associate with, are doing one hell of a lot more discretionary spending
that the younger demographics!
<P ID="signature">______________
When you're done impeaching the prez, keep on going; recall every member of congress and lock 'em up! Let's try NO govt. for a while.</P>
 
Re: Really?

> > Problem with this thinking is that Buicks are no longer
> > being made,

Buicks are still being made. In fact, they are pretty nice cars all of a sudden. Oldsmobile was dropped by GM. But your point is valid, I'm 58. A lot of the products I grew up with no longer exist. New ones have come along to replace them. I like to keep up with what is new and different, and I am very definitely a consumer. I have a lot more buying power now than I did when I was 25-35.

Of course radio advertising, especially for cars, concentrates mostly on interest rates and down payments. That's nice, but I think they miss the point for some people who are more interested in the car than the price. I like to find a car that fills my needs, then we'll talk about price. I guess that's why the car dealers aren't aiming at my age group. They probably consider us to be just a pain in the a**, rather than long term repeat customers who just want to be treated honestly and fairly.

> Whirlpool tried to buy out Maytag in the last few weeks but
> the Federal
> Trade Commisson shot that down. Or did I miss something?
> Did someone
> else come along to buy Maytag?

I believe I read an article in USA Today on Monday, April 3 that Whirlpool is taking over Maytag. FWIW, Whirlpool makes appliances under a variety of brand names, not just their own.
<P ID="signature">______________
Chuck
www.kzqx.com
</P>
 
Re: Really?

> But who I buy it from will not be influenced by radio advertising
> 'cause I don't listen to radio much these days, there being no programming > that interests me at my age.

If such programming was available, would you a) listen to radio (more)?
and b) be more influenced by advertising that you heard?

> And this senior, along with several others I
> associate with, are doing one hell of a lot more
> discretionary spending that the younger demographics!

Exactly the points being made by this thread. No programming or advertising being aimed at the 55+ listening market even though they've got dollars to spend.
 
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