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Market Disruption

carrington said:
In its December issue, Harvard Business Review has an excellent article entitled Surviving Disruption by Maxwell Wessel and Clayton M. Christensen.

Read the article here: http://hbr.org/2012/12/surviving-disruption/ar/1

As usual, these kind of articles tend to embellish or outright lie about certain comparisons. Anyone who has been in IT for any length of time will attest that mainframes have NOT been eclipsed by PC's. Rather, in most cases, PC's have become front-ends to mainframes in the corporate world and in lessor architectures have become an element of distributed computing but I know of not a single "personal" computer on the face of the earth than can do even a modest job of hosting databases of any significant size or multi-tasking to the extent of that accomplished by a mainframe.

This paralysis of thought is as ludicrous as saying a pickup truck is as capable of hauling heavy loads as a dump truck.

carrington said:
Will radio stations die, survive, or thrive?

Read the commentary here: www.haydenhamilton.net

Incredibly, 93% of Americans ages 12 and older listen to traditional radio every week, according to Arbitron's Radio Today (2012).

What this overused statement doesn't say is how long and how often do those 93% listen? In other words, how many ads are they hearing?

Your alarm clock goes off at 6AM every weekday morning and plays for 2-3 minutes while you grope for the 'off' button. Yes, you have just become one of the 93% but how much value did you add to radio's advertising penetration?

Once in the car and heading to work you turn on your favorite CCM station or NPR. Whoops! No advertising there. Again, you just added yourself to the 93% but not really. Not into CCM or NPR so you tune into a commercial station just in time for the beginning of a long stop set. You quickly hit the pre-set to another station on a different schedule.

Once in the office you hear the radio in the background as you toil away but your active listening happens only in the rest room since otherwise you are in meetings, on the phone or doing what your boss is paying you to do. But you continue to make that 93% measurement according to PPM.

Now you're on your way home and for the next 30-35 minute commute (the national average so they say) you flip on the radio to check out the traffic report but instead you listen to 8 minutes of solid stop set and give up waiting plugging in instead your favorite show tunes on your iPod. Alternatively, you could have popped in your favorite CD mix or tuned to a 70's FM HD2 signal which has no commercials. That's OK. You added to the 93% cume this morning. No need to do it again.

Ah.....finally home. You walk in the door to the smells of dinner on the stove and the kids clamoring for your attention. No time for radio now and oh, BTW, the game is on TV later, not radio. But you've already contributed today. No need to do it again. The kids will do it for you, right?

Except that after dinner little Johnnie is in his bedroom blasting away with his new video game and Sissy is on her new iPhone yakking away with her friends. Not only are they not listening to radio, they don't know what radio is. "Oh, you mean that iPod thingy?"

Oops! Radio is in real trouble!!!! But if we put our current content on the Internet and divide it up into thousands of pieces we'll be OK for the 21st century. No worries. ;D
 
landtuna said:
What this overused statement doesn't say is how long and how often do those 93% listen? In other words, how many ads are they hearing?

An advertiser does not care about how many ads a person hears. They care about how many people hear their ad each time it is broadcast. The pricing models for radio are based on cost per point... in other words, what percentage of the total market population does an ad reach.

Your alarm clock goes off at 6AM every weekday morning and plays for 2-3 minutes while you grope for the 'off' button. Yes, you have just become one of the 93% but how much value did you add to radio's advertising penetration?

First, 2 to 3 minutes does not make you a "listener" to Arbitron, even if you listen 2 to 3 minutes each day, every day.

Again, advertisers don't buy "radio". They buy ads on radio stations, and they know how many ratings points each ad delivers. They don't care about the size of the truck... they care about the size of the package.

Once in the car and heading to work you turn on your favorite CCM station or NPR. Whoops! No advertising there. Again, you just added yourself to the 93% but not really. Not into CCM or NPR so you tune into a commercial station just in time for the beginning of a long stop set. You quickly hit the pre-set to another station on a different schedule.

Again, you are missing the point that advertisers pay for delivery, not for the medium.
 
DavidEduardo said:
An advertiser does not care about how many ads a person hears. They care about how many people hear their ad each time it is broadcast. The pricing models for radio are based on cost per point... in other words, what percentage of the total market population does an ad reach.

The advertiser may not care but "radio" better.

DavidEduardo said:
Again, you are missing the point that advertisers pay for delivery, not for the medium.

My point was that a significant number of that "93%" doesn't hear any ads at all. In summary, it isn't how many total people listen to radio but rather how many hear your ad that matters. The 93% number is virtually meaningless.
 
Salty Dog said:
What I can't figure out is how reporters missed the fact that variable online pricing has been going on for years.

I think the point of that particular article was how much more intensive target pricing is today than in year's past. There is still a ways to go though. I notice when distances are used as a pricing or convenience point it is the center of my city that is used. I live one block away from the southern edge of my town so pricing based on distances to the next brick and mortar store are not accurate. The same holds true when maps to a business are displayed.

I can also fool the online shoppers in other ways - by giving a false ZIP code for instance. And since I use a Google phone number as a public number it thinks I live in an entirely different area code as well. If you have a mobile phone the area code is pretty near useless as a location tool.

In short, there are multiple "me's" located out on the 'Net and the 'Net doesn't know which one, if any, is correct. The only sites that really know are the ones having to know for legal reasons.

Ever sit on a plane waiting to take off and wonder how many different ticket prices there were for your flight? There are approximately a dozen different situations that determine how much you paid for your ticket and none have to do with the number of bags you checked. That has been going on for at least the past 30 years and I suspect virtually every flier knows about it. Online targeting should be the same. If someone knows who you are and where you live they can work up a pretty good picture of what you buy and what attracts you to a particular merchant.
 
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