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PPM: The Real Story

D

djdan

NY 6+ and 12+ are out. The pattern of what works in a PPM world is becoming clear. Cume is all over the place but in the key
25-54 demo four AC stations had huge jumps: LITE, Fresh, WPLJ and WKTU. LITE is back to number one in cume and AQH 25-54.
AC also won in Houston where KODA and KHMX are top 2 and again in Philly where B owns everything. Oldies also benefits in
each market. WCBS shot to number two 25-54 and top three in cume. Mainstream CHR rolled in NY with Z-100 top two in cume overall
and running away with 18-34, same story in Houston and Philly.

Rock did not fair well in NY, but did very well in Philly and Houston. Jury is out on PPM and Rock.

AM radio in a PPM world remains troubled, except sports. News/Talk WABC jumped in cume but remained 18th 25-54. KGY jumped in cume, but 25-54 AQH fell in Philly and no AM in Houston is in the top 15 in 25-54 AQH. Hispanic, urban, rhythmic CHR, religious and Air America were killed in the PPM. Expect lawsuits from
minority broadcasters.

For Seattle the PPM is great news for KRWM, KPLZ, KJR-FM, KBSG, KBKS. Mixed news for Country, KZOK, KNDD and KISW. Everyone else, watch out. LA data will be the
first on the West Coast, but a trend is developing for advertising agencies to watch.
 
So is it that the previous data was inaccurate and those who were buying the old way were buying wrong all this time or is the new data suspect? It seems that one of these pictures is wrong. But which one? Maybe we'll see a shift back to results based measurement with good creative copy that drives consumers to the advertiser. Good results from radio can't just be about who's #1 this week, Can it?
 
Having been involved in the PPM creation study sessions as a group consultant I can speak with some authority on the issue. No ratings service is perfect, but clearly the diary method no longer works. Making a small group of people remember what they listened to over a week at the exact time and then remembering to mail it back makes no sense in today's busy world. It worked thirty years ago, but with more stations, more choices and fewer participants the methodology became outdated. I find it quite believable that AC and HOT/AC are under-reported. Many have these stations on at work at don't even know what they are listening to. My gym has KPLZ on and people sing along with the songs, but have no idea what station they are listening to. PPM gives AC stations credit. Many people don't want to write down in a diary they listen to the "teen CHR" or that they actually listen to "Oldies" but they do. Many fans of AM Talk and News and NPR write these stations in diaries because it is what they are supposed to be listening to. In reality the PPM shows most people listen for just a couple of minutes to get traffic and leave. Hispanic, urban, jazz, Christian and rhythmic stations win popularity contests in a diary. Studies show respondents say they listen to these stations much more than they really do because they don't want them to go away. Hispanic listeners enjoy a variety of formats, but feel they have to write down hispanic. PPM takes the guesswork out. Yes there are undersampled segments and fraud, but the same is true with diary methodology. At least listeners can't lie about what they heard and when. PPM is a saviour for sports broadcasts (which many more listen to, than reported in diaries) CHR, AC, Oldies and I believe rock formats will also benefit as the 18-34 wieghting issues are fixed.

There is a clear pattern, but also subtle changes from market to market. AC, HOT-AC, CHR, Oldies will do well. Minorities, fringe and AM formats will suffer. I believe that Country will do better once PPM gets into some Country markets and so will rock and Classic rock. Friends, the PPM is not perfect, but it is better that the guesswork methodology of diary. I would not change format in Seattle for the next 18 months. Why would you waste the money, when the rules are about to change? Wait and see what happens. I can assure you KBKS, KRWM, KPLZ, KBSG and KJR can't wait for the change in methodology.
 
Since these PPM's are electronic can they be hacked and data be tampered with?The new electronic voting machine's that were suppose to be used have had hacking type problem's.How do radio station's using these device's know if info is accurate?
 
PROF: Re people hear a station and can't remember it ....
PLEASE tell me you're not one of the group consultants who ran around telling the stations "dump your jingles" or "go with anti-jingle jingles". Have you ever noticed when stations put in the simple, easy-to-recall jingles you actually see people walk up to you at an appearance and SING the damn things? A little device that delivers top-of-mind brand recall ... and WORKS ... and the consultant's advice so often is "DUMP IT....ya need to sound different"!!!

RE: the PPM can be tampered, voting machines, etc.
Has anyone seen the latest Dyson Vacuum spot where they talk about how many gazillion prototypes it took to get the final product? Same deal with PPM & Voting, etc. The concept is great ... give the developers some time to react to problems and make it good. Not gonna get it right on first try, but doesn't mean we ditch some IDEA that is compatible with the way people live and work, etc. (And you can't convince me that the PAPER, especially all-mail system is not subject to security issues with regard to "bad ballots").

Agree that diaries are seriously outdated ... but if "Time" is calling PPM one of the best inventions of the year, then who are WE to challenge all that "journalistic integrity"!!
 
Hello Mr. DJDAN... Some say that PPM expresses radio more effectively as a reach medium rather than a frequency medium. This would be related to what we are hearing about some dramatic shifts in cume and aqh - having a direct impact on CPP. We hear a lot in the "Taylor On Radio" newsletter and the other trades about how Arbitron and industry leaders are advocating a new approach to selling radio based on these shifts and that CPP should no longer be thee benchmark of evaluation. some say that Ad Agencies don't hear this and are leaning on higher CPPs and lower AQH, while ignoring the higher cume, to erode rates. As more markets switch over to PPM, do yo think you and your colleagues are interested rethinking your strategy for buying radio and the role radio plays in a campaign? OR do you see CPP remaining as a primary tool for evaluating rates and cost? I'm not convinced it matters either way - if agencies continue to evaluate rates on CPP, I'm betting supply and demand will drive the market CPP up as stations balance rate against sell out percentage... As you often express your view as media planner/buyer, I (and I'm betting others too) would be interested to know your thoughts about all of this...
 
Went to a seminar this past week in NY on PPM and media buying. Stations will try and sell exposure (the new word for cume), but advertisers aren't buying it. They want AQH and CPP. If that is the case PPM will actually hurt radio as the LPM is hurting TV because ratings are lower driving up CP. The net effect is a lower price for a :60 spot to achieve the same cost per point. Without getting too complicated, the PPM shows higher cume, but lower time spent listening. The net effect is lower GRP's To get the same rate, stations must raise their Cost Per Point and advertisers aren't biting. That is why national revenue is down in PPM markets so far.

My guess is next year radio will do well based on demand in the third and fourth quarter driven by political. Demand will drive rates. At the conference the consensus was that radio would be okay in 2008. In 2009 demand will drop as political goes away, more markets will convert to PPM and advertisers will demand efficient cost per point. Could potentially be a great situation for advertisers, bad for radio.
 
Thanks for the insight. Well, if your predictions become reality, I wonder what the implications are for the Big Boys like Clear Channel and Entercom. Can they adsorb the potential lost revenue? At what consequences for the industry? Will we see more national based programing (even music) syndicated and less locally produced shows and talent - like satellite radio delivered through broadcast towers (only with commercials). Will sales be even more centralized.

I wonder... If Arbitron and the Radio Industry feel so strongly that AQH and CPP should NOT be the benchmarks for value, do they have the guts to make a bold step and remove those estimates from their Tapscan and Maximiser software? Will (or can) they re-tool the software to specifically express and articulate audience and value in the terms that they are preaching...

Tough questions ahead for both Radio and Arbitron. The interesting dynamic is that the lions share of revenue for Arbitron comes from radio. If radio continues to be unhappy with Arbitron, or if Arbitron becomes bad for business, will the radio industry rekindle the fire to find a research company to provide data that is more compelling for them?

http://publications.mediapost.com/index.cfm?fuseaction=Articles.showArticle&art_aid=71055
 
Your comments are well-timed. A letter went to arbitron today expressing lack of support for the PPM. It is signed by Clear Channel, Cox, Radio One, Cumulus among others. This is the first step toward change. PPM has horrid samples in 18-34 and the net result is very poor. Advertisers aren't buying the "exposure" concept and remain committed to AQH and CPP. The agency tools like Tapscan and Strata still must reflect the diary method since PPM is only in a handful of markets. In my world this is a huge opportunity for advertisers to drive rate per spot into the ground and PPM will be the weapon to do it. If I paid 1000 for a sixty second spot in SF on a station, that same spot will cost me 600 next year because of the compressed CPP driven by lack of time spent listening in the PPM. For four decades no one has bought on cume, why would advertisers start now? It won't happen.
 
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