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Explained: Why Standards is not good business

Re: Agency buyers not at fault.

>
> 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.

Agency buyers are given a target demo and they buy against it, using cost per point as an index to judge efficiency. Buyers do not have the authority to change a campaign demo, which is usually set by the client.

Buyers pick sports when the target is male and in the 25-54 range. Sports stations, while sometimes not even in the top 10 or 15, frequently are top 5 in adult males and are enormously efficient deliverers of men if that is what the clinet specified.

To blame agency personnel in ingenuous. While they may pick one 35-44 female station over another based on efficiency or collateral promotional add-ons, they can not deviate from the demos determined by the client.

Don't single out buyers... all they do is take the specs for the campaign and make the most efficient buys against the client demos.
>
> 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.

Actually, sports is 35-54, which is right in the middle. It is nearly all in the dmos both oldies and standards reach, which are both mostly never specified by clients and agencies.
>
> 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.

Absolutely. It is a business. If McDonalds puts an item on the menu that does not sell, they take it off. Same with radio formats.
>
> Sadly, the advertiser's focus on "youth" is why adult
> standards radio stations across the country are an
> endangered species.

Any station with a predominantly 55+ audience is in danger.
 
Re: wrong.

> 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.

Nope. Wrong.

The ad buyer is presented with the demos the client asked for, determined, usually, by the client's marketing department and around which the product or service was designed, the the ad creative was focused.

The buyer looks for the staitons that reach that demo, and based on ratings and price, indexes them and buys the most efficient. Period.
>
> 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.

Actually, the AE and the media director or planner don't establish the formats or stations to buy. They determine the allocation of budget between radio, TV, print, internet, etc. Then, with the budgets and dates established, the buyers find the most efficient deliverers of the target demo based on pure metrics.

More often than not, format is not considered. I can tell you of hundres of cases of buys at LA's #1 station where creative in English is sent... even though the station is Spanish AC. The station was bought on efficiency, and nobody even looked at the format.

Obviously, you would not market Western Wear on an urban station or Black cosmetics on a soft AC, but otherwise, unless there is clear ethnic use and non-use, formats are far less a consideration than demos and cost per point in the target demo.
>
> 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.

Genrally, the buyer can be the one who ends up sepcifying the stations, based on the cost goals. If a staiton is too expensive, they don't get bought.

> 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.

No, they do not pick the medium or the budget in the medium, but they pick from rankers who gets bought based on rate and audience delivery. A planner seldom gets to this level of detail, except at a small shop.
>
> By the way...most media planners are in their 40's or
> 50's...not 20's.

Which is true.
 
> 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.
>

It is NOT the ad agency that sets the age target... it is the client. And there may be all kinds of research going back to initial product design and packaging design that sets the demo. Generally, 55+ take more exposures to ads to be convinced, and for most consumer products, the investment in mofre frequency negaites any profit on the sale. Further, in retirees, there is nowhere near the sisposable income many believe is out there and advertisers do not use mass media to reach the affluent ones... direct mail, targeted magazines, etc., beign much more efficient.
 
Hey folks: I'm over 45, and I'm not set in product choice. My last SUV was a Ford, current one is a Chevy. Current Truck is a Ford, next one, who knows. Computers, have gone thru several brands, same with A/V equipment, brands of beans, and most other products. No blind brand loyalty period. Regarding adverting---unless it is to let me know a product is newly available and/or provides hard tech specs regarding the product, I view the ad as a red or at least a yellow flag saying "If the product has to be hyped, something aint right!" If I'm considering a purchase, I go on the Internet and seek out hard specs -- not some ad selling sex, youth, or eternal bliss.Maybe the advertisers realize many of we old firts simply are not "ad susceptible" -- not because we have fixed spending habits, but rather because we've been around long enough to realize the ole "buyer beware" Rather than admit that ads are so much B.S., they cover their tails by saying the older demographics are "fixed spenders" kinda like saying we're senile spenders rather than the savey spenders a lot of us are..Well, this old "fixed spender" has fixed the problem of being faced with so much of the old crap on terrestrial broadcast radio, by choosing an alternative -- satellite. Or like when in that movie and "Jack complained about the state of radio on Brokeback Mountain, Ennis said 'If ya cant fix it, Jack, ya gotta stand it or get satellite radio.'"
 
Another nail in the coffin of Standards Stations is being driven by their corporate sales staffs. Typically the AM standards station is the "bastard child" of a cluster of FM "sister stations". If sales folks sold direct they could make their pitch to clients they targeted for their standards station. But salesfolks, like anyone else, take the path of least resistance and go the agency route. The agency already knows its demo and it has little to do with client needs. Its driven by cost per point and what the other agencies are buying for similar clients...The AM gets tosssed into the mix to help lower the CPP and that's it.
 
TowerLamp said:
Another nail in the coffin of Standards Stations is being driven by their corporate sales staffs. Typically the AM standards station is the "bastard child" of a cluster of FM "sister stations". If sales folks sold direct they could make their pitch to clients they targeted for their standards station. But salesfolks, like anyone else, take the path of least resistance and go the agency route. The agency already knows its demo and it has little to do with client needs. Its driven by cost per point and what the other agencies are buying for similar clients...The AM gets tosssed into the mix to help lower the CPP and that's it.
Click to expand...
First, station sellers do not pick the accounts they call on. The sales manager does. In fact, many cluster sellers are only able to sell one or two stations, not all of them. And a seller can not "decide" to just call on agencies. Agencies are handed to the most expereinced transactional sellers. In many larger markets, direct sellers don't have agencies and agency sellers don't have direct accounts. Second, agencies do not set the client demo. The client, through its marketing department, does. This is why agencies seldom buy 55+ because clients so seldom design and market products to that demo. CPP is based on the target demo, so adding in a station that is not in the target will not help the CPP at all.
 
David, you've provided a cogent explanation of the economics of Standards and Oldies radio. And a lot of people on this board (and Oldies board) just don't want to hear it. Hey folks, I come on this board because I like Standards (and Real Oldies). As I type this, I am listening to the music I enjoy on XM Radio. Both the Standards stations I used to listen to (one was local, the other was Westwood One) do sports now. Both have smaller audiences and a lot more ads.And we keep hearing the same arguements:
  • Ad agencies are prejudiced against old people.
  • Sales people need to be trained so they will know how to sell Standards and Oldies, that is combat the prejudices of those people in ad agencies.
  • Look at what I just bought! This shows the agencies are wrong.
OK, let's say you all are right. (I happen to think David has pretty much nailed the situation here but just for the sake of discussion.) It doesn't matter if ad agencies are wrong and are missing a good thing. It doesn't matter if clients are wrong and are missing a business opportunity. It's their money - not yours. You don't pay for radio. (I do pay for radio and I get to listen to what I like.)
 
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