Changes in Radio Measurement Means Big Shifts for Advertisers
For decades, advertising agencies and the media industry have measured radio listenership based on Arbitron ratings. That rating system utilized diaries, or a paper based system that required a group of chosen listeners to manually record what stations they listened to, relying on their honesty to report where and when they were actually tuned in. Many suspected that this was not the most statistically accurate or accountable process, and now their suspicions are proving true.
I laughed out loud when I read a recent New York Times story about the new and improved “Portable People Meters“, because this true measurement tactic calls out those fakers that say they never listen to soft rock by Celine Dion. I personally HATE Celine Dion and her “vocal accomplishments” so my report would be true, but I guess there are a lot of people that say they don’t listen to that kind of music – and actually do.
See, Arbitron’s new People Meters are devices that record what a radio listener is actually listening to, in real time – warts and all. And they have the radio industry’s panties in a bunch, because the numbers are coming in very differently than what had been reported the old way. Imagine that – people were not being completely honest about what they tuned in to, and instead recorded in their old diaries what they thought people would expect them to write. So Joe Six-Pack, who wants everyone to think he’s super tough and macho, is actually listening to my friend Celine Dion warble and butcher love songs instead of the sport talk station he said was his favorite.
I know this to be true, because last year I was tagged to participate in Arbitron’s ratings program, and was excited to see how it worked from the inside. I was literally mailed a “diary”, divided by dayparts and calendar dates, and asked to write in what radio stations I listened to, and when. Knowing my good friend Monique Marvez was doing her morning show at San Diego’s Jack FM, I naturally “listened” to her. A lot. Now a people meter might have proven otherwise.
This has huge implications for our industry, and for media buyers across the country. Radio stations that had enjoyed market domination and high ratings, with the advertising rates that went with that position, are dropping dramatically in the new ratings world, while others are rising. Some can no longer charge the big bucks, because their accurate listener numbers are far lower than previously reported. In this topsy turvy new world, soft rock is showing stronger listenership, talk radio is dropping, and unfortunately we are witnessing the death knell for classical music on radio because no one is apparently listening to that at all.
Good thing advertising agencies like ours have savvy media buyers who can navigate these new waters and plan an effective media buy. It will be interesting to see which radio stations come out on top, and which scramble to adopt more competitive new formats as these numbers continue to unfold…
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I believe this system has the potential to provide more accurate ratings and listenership numbers than in the past. Having purchased radio on local, regional and national levels using Arbitron’s software as the primary research tool, I was always skeptical as to what the true numbers were. A few years back our rep was telling me of their new “pager” system that would ping someone to record what they were currently listening to as a means to better accuracy. As always, the system will continue to evolve (and hopefully improve). Interesting post Jon – thanks!
Excellent blog entry. As a child, I once filled out 5 Arbitron diaries of listenership because I knew I would receive $3. Needless to add, my submissions were likely less than accurate. The thought of investing a client’s radio dollars based on this erroneous data is frightening to me now. With the leveling off of radio ratings, media planners and buyers have to dig a bit deeper to select stations that work for their clients. No longer are there the obvious no. 1 and 2 “must buy” stations. It’ll be interesting to see how stations continue to react to the data over the next few years.
Clearly with the latest news on radio stations and massive cuts in production and talent, the latest numbers are showing radio cannot support some of the rates or claims they have made over the years. I wonder if the new ratings system has any part in this, or is it simply the economy? Hmmm….
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That’s a good point Jon. I think it’s a little bit of both, coupled with new listening options like satellite radio as well as free online music sites like Pandora and Grooveshark (that can be accessed through a mobile device and played through your car radio). Radio, like the internet, is becoming extremely fragmented and I don’t believe the radio stations as we know them are equipped to handle the competitive landscape at this time.
Great information and discussion on the PPM. I read this post awhile back and recalled the blog today during a client meeting. I am putting together my Q1 radio schedules and pretty shocked to see some of the “big dogs” falling short on the list of popular stations. Jon, I get a kick out of the Celine analogy, but it is accurate. Steve brings up a valid point about fragmentation – stations need to find their niche and research their audience accordingly.
[...] advertising industry in a bit of a quandry. Rating points that were already a bit sketchy (see my previous blog spot on Arbitron ratings) are now completely unproven and unreliable. Advertisers that have been buying radio based purely [...]