Tuesday, April 27, 2010

How Radio & TV Ratings Work (Part Two)

First, read what I wrote last week by clicking here, if you have not yet read Part One.

Welcome back.

We're jumping into this with both feet which is why you needed the background info I wrote last week.

Every week, I receive phone calls and emails from advertising agencies around the country wanting information on the radio stations I represent. Usually it is the Media Buyer who is looking for the best way to spend their clients money.

What they are usually looking for is something called Reach & Frequency. That's good. However how they measure the effectiveness is what I question.

(Reach refers to how many individual people the commercial will reach and is based on the size of the radio stations audience and the number of ads that air for the business.

Frequency refers to how often each individual listener will hear the commercial.)

Terms like Cost Per Point and Gross Rating Points are on their list of items to work with.

Arbitron defines these terms:

Gross Rating Points (GRPs)

The sum of all rating points achieved for a particular spot schedule.

[AQH Rating] x [the number of spots in an advertising schedule] = GRPs

Cost Per Rating Point

The cost of reaching an Average Quarter-Hour Persons audience that's equivalent to one percent of the population in a given demographic group.

[Cost of Schedule] / [GRP] = Cost Per Rating Point
[Spot Cost] / [AQH Rating] = Cost Per Rating Point

These mathematical calculations can result in some pretty weird advertising schedules.

But my biggest complaint is that it is often short term thinking based on flawed numbers to begin with.

So, when I work with clients who are not represented by an advertising agency media buyer, I use what I call common sense. And usually that common sense tells me that it is best for my client to "dominate a daypart".

Radio Dayparts are 6am to 10am (morning drivetime) 10am-3pm (mid-days) 3pm-7pm (afternoon drivetime) 7pm-12midnight (evenings) and 12midnight to 6am (overnights).

To dominate a daypart, my client should air at least 3 out of 4 hours in mornings or afternoons, or 3 out of 5 hours in mid-days and evenings. This creates a stronger impression on listeners than what some of the crazy schedules I see coming from media buyers, where I will see 5 ads in mid-days for an entire 5 days versus my formula which says you should air 15 times, minimum during that same 5 hour a day, 5 day a week time period.

Please understand that I'm not insulting media buyers. Most have been trained to buy by the numbers and formulas. As a matter of fact, I will often propose an advertising schedule to the media buyers I work with based on the daypart domination that I explained.

I think next week, we'll talk about how to increase the effectiveness of your advertisement, that has nothing to do with ratings. Your comments are always welcome.

Tuesday, April 20, 2010

How Radio & TV Ratings Work (Part One)

And why it is a flawed system....

This week I thought I'd go further into explaining a system that people think they understand, but most don't.

Radio ratings. Arbitron is the major provider of this information. Television ratings are similar and the company that provides that information is Nielson.

Eight years ago, when I was taking a sabbatical from the advertising world, our family participated in a Nielson survey. People who work in these industries are prohibited from taking part in these surveys.

We received the form to fill out, which asked us to write what we watched each day for a week. The first day, I filled the form out correctly. The next 6 days, I forgot about it. But I watched TV each day, so on the 7th day, I filled out what I probably watched the previous week and mailed the form back.

I'm sure this is typical for both radio and tv rating surveys. Which means the data is flawed. It is not a true, hour by hour diary of your listening/viewing habits, it is a guesstimate of what you probably did on most days.

But in our market, Fort Wayne is currently market # 105 or #106, this is how radio ratings are gathered twice a year, for 3 months in the spring and then 3 months each fall. The radio stations that pay for the results, (Thousands of $$$$$) get the use of the results when they are complied and released.

Our current rating period runs April thru June and we won't get the results until the end of August. Originally these ratings services were used by program directors to measure the effectiveness of their jobs and for bragging rights. But then they became a tool for advertising agencies to place commercials and negotiate price.

This is where things have become really crazy, when we think about it. Remember the inaccuracies of each survey, multiplied by the thousand or so people who fill out a survey, which is then multiplied to reflect the listening/viewing habits of an entire city, or in our case, 6 county Metropolitan Area of nearly 1/2 a million people.

Still with me? Good, here's how Arbitron counts radio listeners using the diary/survey system:

Arbitron counts individual people, called Cume for Cumulative persons. Arbitron also counts when and how long a person listens to each radio station and tallies this number up and calls it Average Quarter Hour.

If you listen to radio station WWWW from 6:10 to 6:35 am each morning, then turned the radio off until after 7am, you and I know that you listened for 25 minutes. However, using the Quarter Hour system that Arbitron uses, you listened in 3 Quarter Hours. 3 Quarter hours sounds like 45 minutes right? Not according to Arbitron.

If you listened for a least 5 minutes, you get credit for listening to that radio station for an entire 15 minute quarter hour. So, from 6:10-6:15 is one, 6:15-6:30 is two, and 6:30 to 6:35 is three Quarter Hours that radio station WWWW gets credit for you as a listener.

And if you listened to WAAA from 6:00 to 6:05 and then WBBB from 6:05 to 6:10 before you listened to WWWW for the next 25 minutes, they get credit for having you as a listener too for that same 6:00-6:15am Quarter Hour. Only if you wrote all of this down on your survey form.

Sound a little crazy? Let's add this up. WAAA get's 1 Quarter Hour, WBBB gets 1 Quarter Hour, WWW gets 3 Quarter Hours, for a total of 5 quarter hours in less than 60 minutes. In our example, you actually listened to the radio for 35 minutes, yet Arbitron counts 75 minutes (5 quarter hours).

Next week, I'll explain how Ad Agencies use this information.

Tuesday, April 13, 2010

Ignorance is not bliss...

First, let me explain my entire marketing philosophy:

  1. Marketing encompasses everything that you do and don't do that creates an impression upon your "market".
  2. Your "market" is your current, future, and past customers along with those that will influence those people who may not be directly your customers.
  3. Successful Marketing understands and follows human relationship principles.
That's the basis for ScLoHo Marketing Solutions.

Now let's look at the real world.

For about 10 years, I took a break from the advertising, sales, and marketing world and worked a few "real jobs" and rediscovered what a consumer goes through in real life. So I have a unique background of working in the communications and entertainment world, working in the advertising and marketing world, stepping away for about a decade and then returning with a keen understanding of all sides of the picture.

And now I get to work with business owners who are being sold advertising schedules that sound good by advertising sales people who earn a commission on what they sell.

Often, due to an emphasis on selling, these advertising schedules are either a failure or cannot be justified because the advertising sales person has limited knowledge of the three marketing points I listed, or is more interested in their own paycheck.

And sometimes it's simply a matter of ignorance, no one knows any better, so the business owner buys what sounds good and the advertising sales person sells what they've been told to sell.

Some business owners decide to hire an advertising agency to take care of all of these things, so they can focus on what they do best, running their business.

Problem is that advertising agencies are similar to advertising sales people a lot of the time. I know because I work with several of them. I've even considered joining one or two if I could find a good philosophical fit.

In the ad agency world, they create marketing pieces and advertising copy and commercials, print ads, billboard signs, etc, etc, etc...

A couple years ago I attended our local Addy Awards, the competition that the creative types in ad agencies want to win, because, well, it's like getting an Oscar, Emmy, Pulitzer, except it is for advertisements.

I was impressed with the talent we have in my city, when I saw the work that was presented.

And I am also impressed with most of the agency owners that I know. Their hearts are usually in the right place.

I usually work with the media buyers at the ad agencies however, and this is where the cookie starts to crumble.

In Radio (and also Television), most media buyers place advertising based on a rating system called Arbitron or Nielson. These companies are paid thousands of dollars to conduct surveys of individual listeners and viewers habits and then come up with numbers representing the strength of each station based on this data.

Without going to deep into the details, of why this is usually a flawed system, it is also the wrong system to use to buy advertising because it ignores principle #3 above. I look at it as more of a justification for the media buyers to explain why they spend their clients money here and not there.

While I am not about to change this practice singlehandedly, and I do enjoy working with media buyers, I disagree that an advertising agency is always the best way to handle your marketing.

Because there is a big difference between advertising and marketing. Look at principles 1 & 2 above and consider all the items that don't include paid advertising that are still part of your marketing.

Is there an answer to all of this?


When it comes to the success of your business, look at the big picture from an outsiders view.

Look at the small details of what influences people to do or not do business with you and fix what you can.

Make sure your advertising efforts follow human relationship principles.

Beware of slick talking salespeople who either care more about their dollars than yours, or are just too ignorant to truly help.

Your comments are always welcome.

More on this next week.

Tuesday, April 6, 2010

A Quick Start to Using Social Media to Draw People to Your Website

I've been meaning to write this for awhile.

This is the advice I give to my radio clients.

It's the advice I give to nearly anyone that wants to get found online.

It's not a quick process.

It takes discipline.

It requires your time.

  1. Start a blog. Update it at least once a week.
  2. Set up a twitter account. Use it to promote, interact and share with others.
  3. Set up a Facebook page. But be selective with what you do with it.
Let's start with your blog.

Once a week, tell a story about your business. Change the names to protect privacy of the people you are talking about if you want, but be real. Talk about the customer that was looking for something and you were able to help. Share tips on your area of expertise.

But most of all, keep updating it. Weekly is a minimum. Daily if you have the time.

I recommend using Blogger.com It is an easy to use platform and is owned by Google. Google is always looking for fresh content and after awhile you will probably start showing up in Google search results.

One other Blog hint: include a picture with each post.

Twitter is my favorite online method of promoting my blog postings. Most of my new blog postings, I promote with a link on Twitter. Many people don't understand Twitter, don't use Twitter, but they use Facebook, which I'll get to in a moment. Over the weekend, I posted my 10,000th Tweet since I signed up in October 2008.

I use Tweetdeck as a way to manage my Twitter account on a daily basis and unless you are compulsive about it, Twitter can be a useful communication tool. Somehow, I've gained over 900 followers and made friends with others in my home town and also around the world in areas that we are both interested in.

Now, Facebook.

Facebook to me is the social media platform that I really don't like but it is too big to ignore. The number of people with Facebook accounts, if they were a country would be one of the top 3 or 4 countries in the world!

What don't I like about Facebook? The games like Mafia Wars and Farmville that friends play and it shows up in my updates. The various other applications that are in my opinion silly. But the biggest problem I have with Facebook is they keep changing the layout and privacy settings.

What I like about Facebook is that because so many people are on it, odds are if you want to connect with old friends, new friends, or family, they are probably on Facebook.

But having a blog, a Twitter and Facebook account will not draw people to your website.

You need to provide links, not copy and paste style, but clickable links that go to your website.

And on your website, you need to provide links to your social media sites.

Click here and you'll go to my website where you'll find clickable links to my blogs, my radio stations, and even links to the most recent blog posts.

It has taken time, work and discipline but it works.