Why?

[radiolover78]

Why aren't advertisers interested in anyone above the age of 55?

I just don't get it.

 

[davideduardo]

Why aren't advertisers interested in anyone above the age of 55?

I just don't get it.

Several reasons:

1. ROI. return On Investment. It taks more ads to get older people to change habits, and sometimes the cost is more than the profit.
2. Product design. Many products are designed for a specific consumer, right down to the packaging, using lots of research. Ads are not directed at anyone else.
3. Retired people have little discretionary income. Most have only sSocial security and not a pension or savings.
4. Younger people are gnerally more prone to switching brands.

In the first 8 months of 2006, not a single buy in LA, where niearly 6% of all US radio revenue is generated, was for 55+. The top 10 markets generate a third of all radio revenue, and there is no agency demand for teens or 55+. This is why ther eis no programming for these groups.

 

[fred flintstone]

People on this board (and the standards board) don't want to get it. The keep asking this same question over and over. People explain it to them. It's not the answer they want, so they don't hear it.

Another factor: 55+ consumers are not core consumers of most products. Marketers talk about the 80/20 rule. The top 20 per cent of consumers account for 80 per cent of sales. Marketers get a bigger return when they reach a core consumer rather than an occasional user. The radio advertisers are mostly marketers of consumer package goods; these are the products most suitable to radio advertising and with the budgets to pay for it. By the time people pass 55, they are (almost all) empty nesters. Their houses (to paraphrase George Carlin) are filled with stuff. The kids are gone. Therefore, there are all sorts of products they don't buy any more - or don't buy nearly as much of. People who a filling their houses with stuff and have kids are the people you want to reach.

And the fact that people on this and the standards board keep making this same complaint (disguised as a question) over and over - rather than going out and getting satellite radio - is evidence the advertisers are right.

 

[TheFonz]

And the fact that people on this and the standards board keep making this same complaint (disguised as a question) over and over - rather than going out and getting satellite radio - is evidence the advertisers are right.

Maybe you're missing the real question here: how is commercial radio going to SURVIVE without the 55+ audience? The radio people on this board aren't answering that question.

 

[fred flintstone]

And the fact that people on this and the standards board keep making this same complaint (disguised as a question) over and over - rather than going out and getting satellite radio - is evidence the advertisers are right.

Maybe you're missing the real question here: how is commercial radio going to SURVIVE without the 55+ audience? The radio people on this board aren't answering that question.

With the 25 to 54 audience.

Here is your mantra: Radio is a business.
Radio's customer is the advertiser.
Radio sells the attention of its listeners to advertisers (who pay for that attention).
Programming is what gets listeners' attention.

Advertisers want the attention of listeners who will buy their product and who - ideally - will be repeat customers or heavy users of their products. They know a lot about what kinds of people buy or don't buy their products - what they buy, when they buy it, how much they buy and why. Think of radio as a big store with limited shelf space. 55+ listeners are a line of merchandise that is not selling well. So, that line of merchandise gets discontinued so radio can stock more of the merchandise customers (advertisers) will buy.

If radio needs to worry about "surviving" without particular listeners, it would be under 18 and 18 to 34 year olds. One is the future money demo and the other is the younger portion of the current money demos. These people are leaving radio for new media and new technologies. So as these people age, radio will have trouble stocking them and selling them to advertisers.

Radio sold people now over 55+ to advertisers since you/they were 12. In return, you/they got free radio - paid for by advertisers. Now, that's over. Advertisers do not see sufficient value in reaching you/them with their ads to pay for your/their radio programming (Oldies or Standards), so radio has no reason to program stations to get your/their interest. The question radio faced is how NOT can radio survive without the 55+ audience - it's how can it survive WITH the 55+ audience? The answer is, without advertiser interest, radio can not make money and can not survive.

Oldies has moved. As a practical matter, radio has moved.
The music known as Oldies started on AM and was called Top 40.
Then it moved to FM and was called "Oldies."
Now it's moved to satellite radio, and to the Internet.
If you are reading this post, you could be listening to any one of hundreds of Oldies channels.
Instead of complaining about the Oldies stations that's not there any more and isn't coming back.

 

[radiofriend1]

And the fact that people on this and the standards board keep making this same complaint (disguised as a question) over and over - rather than going out and getting satellite radio - is evidence the advertisers are right.

Maybe you're missing the real question here: how is commercial radio going to SURVIVE without the 55+ audience? The radio people on this board aren't answering that question.

easily. there's lots of listeners and tons more revenue BELOW 55

 

[Johnny Morgan]

http://radio.about.com/od/satelliteradio/a/aa031805a.htm

And it now appears that, despite YOUR own mantra, 18-34 year olds are the ones buying satellite radios as well as other forms of alternative media (i.e., iPods, internet services, etc.). So, radio may well be losing them, or at the very least, they are curtailing their radio listening. This trend can only increase as this group ages from the young end of the money demo into the cream of the money demo. Current statistics on radio listening oft cited by friends on this board show a negligible decline overall, but are not posted in demo category.

In that case, what will happen?

(A) Radio will continue to aim at a group of listeners that is not paying as much attention to the medium as it once did as an advertising bloc, and as a result, fewer advertisers will buy radio spots; or

(B) Radio will have to redesign its programming to appeal to a broader audience; or

(C) Advertisers will have to change their product development or marketing or both.

Since (C) is unlikely to happen, we're left with either (A), and the radio industry withering due to a lack of money to go around, or (B) radio becoming less demographically biased and more of an open medium.

As fewer advertisers wish to advertise on a medium listened to less and less by 18-34 (and in 10 years, 28-44), those limited number of advertisers will have more and more stations to choose from. You can't have everyone aiming at the same group and expect the same results. Limited dollars and high supply does NOT mean higher ad rates. Eventually radio will realize that it is not the chosen medium for advertisers--at the same time advertisers realize that fewer monied folks are coming down the line listening to radio.

Something's got to give. 15 stations in a market selling to 25-54 is not going to make for success all around. So, will those unsuccessful continue to wither on the vine waiting for a 25-54 ad buy?

If so, I might suggest that they check their 401(k)...they'll need it sooner than they think.

Or better yet, maybe have fewer stations?

Or even better--gear a station toward what listeners want to hear. Yes, it won't be a commercial success...but maybe that's what needed now, a lesser commercial glut. Just saying.

I know you commercial guys don't want to hear that. But coming down the pike is something that no one has yet been able to answer--who will radio serve when the 18-34 crowd now not listening to radio ages into the target demo...and STILL aren't listening to radio.

 

[fred flintstone]

What's already happening is a shift to formats targeting minorities - Urban and Hispanic formats.
Advertisers will buy them and those listeners are slower to shift to newer media (or "more loyal" to radio depending on your viewpoint).
Some stations may turn in their licenses.
More will go brokered.

Radio does not have enough bandwidth to please everybody - never did.
Neighborhood book stores can't compete with Amazon.
Local video rentals can't compete with Netflix.
Music stores can't compete with iTunes.
And terrestrial radio can't compete with satellite and Internet radio.
Radio programs for the common denominator.
Satellite and Internet radio can give everybody exactly what they want - no matter how small the niche; no matter how obscure the taste.

If satellite radio and Internet radio were advertiser-supported, the same would apply. They would be able to offer every possible audience segment to every advertiser at an affordable price. Radio is a scarce resource. So they can only offer the most in-demand audiences to advertisers; if they try and offer less in-demand audiences, they lose money.

 

[Johnny Morgan]

Formats targeting minorities--by definition, not a major audience source (if they were, they wouldn't be minorities).

Nice to finally see someone recognize what the situation is--there will be fewer stations or they will sell to whoever wants the time. Which means that alot of radio folks will be out of a job.

Unless something drastic changes, which consists of the radio industry changing their business model from commercial-dominant or demographically-biased to non-commercial or non-demographically-biased.

Either way, what's happening now won't be happening in 10 years.

Maybe broadcast radio needs to re-evaluate how it delivers information, entertainment, services, and the like. Perhaps it was a mistake to be advertiser-driven instead of listener-driven, that is ad-based instead of support-based.

Just suggesting.

 

[fred flintstone]

What?

Maybe broadcast radio needs to re-evaluate how it delivers information, entertainment, services, and the like. Perhaps it was a mistake to be advertiser-driven instead of listener-driven, that is ad-based instead of support-based.

Just suggesting.

What exactly are you suggesting?

The public radio model? About eight per cent of listeners contribute. Most of the money comes from corporate underwriters (i.e., advertisers). Public radio stations have been moving away from classical, jazz, folk to news-talk and alternative. Why? Because that's where the money is. Just like commercial radio.

The British model? A tax on receivers to pay for radio programming. Government control. All the money for all of radio coming through CPB. Programming decisions based on which wheels squeak the loudest.

The subscription model? We already have it. It's called satellite radio. People here apparently don't want to pay for radio, which is why we are having this conversation.

The only way that would work to get more formats on the air is more stations. The FCC could have given channels five and six to FM when VHF TV shuts down, but they didn't. Too many people competing for space in the electromagnetic spectrum - and other users - unlike broadcasters - pay for bandwidth. The NAB has used their very effective lobbying clout to keep from paying. Now it's come back to haunt them. No more bandwidth for terrestrial radio. (HD Radio? People won't pledge to public radio. They don't want to pay for satellite radio. They won't pay $300, each, for new HD radios playing canned versions of each station's old format.)

 

[Johnny Morgan]

The subscription model? We already have it. It's called satellite radio. People here apparently don't want to pay for radio, which is why we are having this conversation.

By "people here" I assume you mean "people on this board". But I'm not talking about that--I'm talking about 10 years down the road, when the people who ARE buying satellite radios, and iPods, and internet broadcasts, etc. are the key demo. Radio's not going to have anywhere to go, because those folks won't be listening to radio. So, you'll have radio stations without advertisers.

So, unless all those stations go silent, radio will have to change its business model and not rely solely on advertising to pay the bills.

And if it's going to change, it should start now, lest it hang on to what won't work in 10 years.

And one way to change is to get rid of the insane idea that it always and forever needs agency ad buys targeting folks in the heat of mid-life crises to survive. Because at some point in the very near future, those agencies are going to go away and never come back.

Then you'll be left with 50,000 watts of [EDIT].

[EDIT-profanity]

 

[davideduardo]

Maybe you're missing the real question here: how is commercial radio going to SURVIVE without the 55+ audience? The radio people on this board aren't answering that question.

We survive quite nicely without 55+, because terrestrial radio is ad supported. Since there are no radio campaigns for 55+ and no advertiser gives money to stations to reach 55+, we will not be doing this until the advertising model changes, which I doubt because the decision is ROI based and targeting 55+ has very low ROI if any.

 

[davideduardo]

Something's got to give. 15 stations in a market selling to 25-54 is not going to make for success all around. So, will those unsuccessful continue to wither on the vine waiting for a 25-54 ad buy?

99% of the buys today and for the last decade or so are against 18-54. All these demos and subsets continue to have very comparable reach when compared iwth 10 and 20 years ago. And since ad prices are based on persons (CPP) and not "share" the advertiser continues to get good value, even if TSL is off somewhat in the last 20 years.

 

[Johnny Morgan]

David, I understand that.

But what we're looking at is the younger side of that current demo (18-34) being the primary purchasers of iPods, and alternative delivery medium, and satellite radio, a head-on competitor to terrestrial radio. The 44 year-old is not buying satellite, so advertisers can still try to sell to him.

But looking 10 years down the road, what will radio do when the current 26 year-old who has both a satellite radio and/or an iPod (with podcasts) and has turned off the radio for the majority of the commute to and from work is now 36 years-old, with kids, and the same or simlar commute--who had all but turned off the radio for the intervening 10 years.

If similarly situated listeners aren't listening to terrestrial radio, what incentive is there for advertisers to buy ad time on a medium that won't deliver, even within the target demo?

And that's just an example of a 26 year-old--the same holds true for the current high-end of those buying satellite (e.g., 30-34 year-olds). As these folks get more money, doubtless they'll choose to take it with them. Both XM and Sirius are adding listeners; iPod sales are a virtual phenomenon. This differs greatly from television, which is not portable. These are media that have the same quality of radio--portability, access in vehicles, and real-time delivery.

It's all well and good to look at ten or twenty years ago, but radio-replicating media was not around then. Satellite and iPod are new obstacles, and ones that are leading to diminished TSL and even cume of broadcast listening among the younger sets (under 35). As I have mentioned, no one can explain what will happen when (not if) the 18-34 folks never come back. If there continues to be an advertiser-centric emphasis, when listeners aren't there, advertisers will have no reason to use broadcast to reach them.

That is the question.

 

[cyberdad]

The "problem" isn't with the broadcasters.  Its with the advertisers and the agencies.
You can do all the math and make a good argument for a broadcaster going after anyunderserved demo.  The broadcaster can even pull fantastic numbers in that slice, and have a large, significant loyal following  But if advertisers aren't buying that demo, the broadcaster will fail financially.

As for those who are whining about the loss of terrestial oldies radio....get over it!  Most of the stations that died weren't very good to begin with.  They got a fate they richly deserved.

I recently slipped into the "undesirable" demo myself.  I also like oldies. Would I like it if there were more terrestial oldies stations around?  Sure!

But guess what!  Between the web, my Ipod, and my satellite radio, I've got more choices, more song variety, and better audio quality. etc/ than there ever was "back in the day".  And as technology advances its all only going to get better and better. 

So quit griping and take a look at all that's now right out there in front of you!  Prove to your critics that you can indeed adapt 21st century technology....and like it!

B*tching about the "loss" of terrestial oldies/pop standards radio only reinforces the stereotype of boomers with one foot in the grave and the other on a banana peel....refusing to accept change or reality.

 

[radiofriend1]

agree with all u said

some folks have a tuff time letting go-most are the most cynical & disgruntled with the business.

of course, i remember the same uproar when most music listeners left am for fm in the 70s-radio survived just fine

 

[TheFonz]

David, I understand that.

But what we're looking at is the younger side of that current demo (18-34) being the primary purchasers of iPods, and alternative delivery medium, and satellite radio, a head-on competitor to terrestrial radio. The 44 year-old is not buying satellite, so advertisers can still try to sell to him.

But looking 10 years down the road, what will radio do when the current 26 year-old who has both a satellite radio and/or an iPod (with podcasts) and has turned off the radio for the majority of the commute to and from work is now 36 years-old, with kids, and the same or simlar commute--who had all but turned off the radio for the intervening 10 years.

If similarly situated listeners aren't listening to terrestrial radio, what incentive is there for advertisers to buy ad time on a medium that won't deliver, even within the target demo?

And that's just an example of a 26 year-old--the same holds true for the current high-end of those buying satellite (e.g., 30-34 year-olds). As these folks get more money, doubtless they'll choose to take it with them. Both XM and Sirius are adding listeners; iPod sales are a virtual phenomenon. This differs greatly from television, which is not portable. These are media that have the same quality of radio--portability, access in vehicles, and real-time delivery.

It's all well and good to look at ten or twenty years ago, but radio-replicating media was not around then. Satellite and iPod are new obstacles, and ones that are leading to diminished TSL and even cume of broadcast listening among the younger sets (under 35). As I have mentioned, no one can explain what will happen when (not if) the 18-34 folks never come back. If there continues to be an advertiser-centric emphasis, when listeners aren't there, advertisers will have no reason to use broadcast to reach them.

That is the question.

Wow! This is a great discussion. I'm glad I asked the question.

 

[davideduardo]

David, I understand that.

But what we're looking at is the younger side of that current demo (18-34) being the primary purchasers of iPods, and alternative delivery medium, and satellite radio, a head-on competitor to terrestrial radio. The 44 year-old is not buying satellite, so advertisers can still try to sell to him.

The main buyer of satellite is 45+. The XM paid-for satellite ratings show the talk channels leading, with oldies second.

The impact of satellite is about a 0.4 share nationally... the share of a bad daytimer in most markets.

iPods are no different than 45's in the 60's, and are personal music collections. Every kid I knew had a 45 player, too.

But looking 10 years down the road, what will radio do when the current 26 year-old who has both a satellite radio and/or an iPod (with podcasts) and has turned off the radio for the majority of the commute to and from work is now 36 years-old, with kids, and the same or simlar commute--who had all but turned off the radio for the intervening 10 years.

Since satellite has hit a wall subscriber-wise, and is being investigated for inflating subsciber counts by the SEC, this is too theoretical a question. It is not happening now, so it is hard to project. One analyst said that all the early adapters had bought and now the value seekers had to be convinced... and they are not.

And that's just an example of a 26 year-old--the same holds true for the current high-end of those buying satellite (e.g., 30-34 year-olds). As these folks get more money, doubtless they'll choose to take it with them. Both XM and Sirius are adding listeners; iPod sales are a virtual phenomenon. This differs greatly from television, which is not portable. These are media that have the same quality of radio--portability, access in vehicles, and real-time delivery.

Ah, but they are not adding very many. In fact, XM has revised projections considerably downwards and then there is the SEC thing. It has stalled. The stock is off 64% from its hogh of the last year. Ouch.

It's all well and good to look at ten or twenty years ago, but radio-replicating media was not around then. Satellite and iPod are new obstacles, and ones that are leading to diminished TSL and even cume of broadcast listening among the younger sets (under 35). As I have mentioned, no one can explain what will happen when (not if) the 18-34 folks never come back. If there continues to be an advertiser-centric emphasis, when listeners aren't there, advertisers will have no reason to use broadcast to reach them.

I find it ingenuous to take a decade of change that includes one startling fact which is that Americans are working about 20% more hours today than in the mid-90's, and conclude that the minor erosion of TSL is due to satellite and the iPod.

In the last 20 years, we have had the CD reaching affordability, the DVD, HDTV, the affordable PC, realistic video games, more cable channels, longer work hours, and far more leisure activities. Ten times more people play video games on a gaming device than have satellite, in fact.

It is amazing that radio held up so well: no significant cume erosion at all in 18-54 (nearly all is in teens and 55+, which we do not serve at all). TSL is off about 1:45 to 2 hours out of 21 that was the average in 1995. 10%. With all the alternatives, quite resilient on radio's part.

 

[Johnny Morgan]

But no kid in th 60s took his 45 player with him in the car, or to the gym, or walking between class. The places that used to be province of the transistor radio or the walkman are now the iPod province. And unless I'm well behind the times, no iPod has a radio tuner included.

Are you not at all worried about cume erosion in the teens category? It seems that forgetting them in the short-term without thinking that they may never come back to radio in 10-15 years is ignoring the advertisers' demo down the line. What faith do you rest your assertion on? The fact that teens 10 years ago did so?

Those teens did not have the luxury of much else. Not so today.

And as for the satellite audience numbers, no single study seems to do justice to the actual figures--in a Google search, two different studies bring two different results (one, the poll I posted earlier said that satellite was an 18-34 buy, the other said it was a 35+ buy). If there's another study out there--recently, i.e., since January 2006--please point me towards it. In a totally unscientific study, one the one hand, I know exactly one person over 40 who has a satellite radio, while on the other hand, I know at least 15 under 35 who have satellite. And the one over 40 is our station's PD, who got it for Howard Stern. Again, unscientific, but pretty stark.

But this doesn't answer the question, and if you ahve statistics that can bear this out, please enlighten me and us. What is radio usage among those under 35 versus those over 35. The negligible decline you mention is an overall number between 18-54. But how does it break down further, if that's available?

If it's as I suspect, my theory still holds--10 years down the line, radio industry folks are going to pulling their hair out when advertisers stop buying on a medium that doesn't have any listeners. The solution, then, is not to continue a plan that will eventually fail, but to try a different method of business that is not dependent upon advertisers to sustain the station.

That is, if we really need all these stations at all.

(And as one more sideline, the solution most certainly is NOT giving more stations to the same folks who are headed towards this crash. Continued consolidation isn't helping.)

 

[davideduardo]

But no kid in th 60s took his 45 player with him in the car, or to the gym, or walking between class. The places that used to be province of the transistor radio or the walkman are now the iPod province. And unless I'm well behind the times, no iPod has a radio tuner included.

But you can add a tuner. And the iPod is just a bit smaller than that Walkman you mentioned. Or the portable CD player. They are all personal music collection devices, no matter how you look at it. And radio has coexisted with such devices for far more than 50 years.

Are you not at all worried about cume erosion in the teens category? It seems that forgetting them in the short-term without thinking that they may never come back to radio in 10-15 years is ignoring the advertisers' demo down the line. What faith do you rest your assertion on? The fact that teens 10 years ago did so?

Not in the least. We do not program to teens, so why SHOULD they come? What we have seen over the last 15 to 20 years when addressing teens has become increasingly less relevant due to the total lack of teen ad buys is that teens seem to have lots of free time that adults with jobs and new family responsibilities do not. They turn back to radio in the 18-24 years, and are fullly as high users as any time in history by the time they get to age 25.

Those teens did not have the luxury of much else. Not so today.

Radio has not addressed them for nearly two decades. And there were cassette and CD players galore before.

And as for the satellite audience numbers, no single study seems to do justice to the actual figures--in a Google search, two different studies bring two different results (one, the poll I posted earlier said that satellite was an 18-34 buy, the other said it was a 35+ buy). If there's another study out there--recently, i.e., since January 2006--please point me towards it. In a totally unscientific study, one the one hand, I know exactly one person over 40 who has a satellite radio, while on the other hand, I know at least 15 under 35 who have satellite. And the one over 40 is our station's PD, who got it for Howard Stern. Again, unscientific, but pretty stark.

XM pays Arbitron to do ratings. The little data that is released (most is for internal use) shows the big buyers are adults over 35. The biggest single group are truckers and folks who drive between cities. Keep in mind, over 90% of satellite receivers are in cars, permanently. Only 30% of terrestrial radio listening is in cars, so it takes 3 times as many XM users to equal one free terrestrial user.

But this doesn't answer the question, and if you ahve statistics that can bear this out, please enlighten me and us. What is radio usage among those under 35 versus those over 35. The negligible decline you mention is an overall number between 18-54. But how does it break down further, if that's available?

I have tabulated Arbitron diaries by hand for satellite in a couple of markets, and the bulk of listeners are over 35, just as the data that has come from XM has shown. I also was party to a lot of the inside data when I programmed for XM in the first 3 years. They expected the coolness to drive the system. Interestingly, it was the truckers and the disenfranchised Music of your Life fans. In other words, XM and Sirius feed off the people who traditionally have not used radio or used it little. As such, it is far less a threat than it appears. It is also expensive.