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Guest commentary on broadcast media buys

Today, something a little different. Last week, I received a letter from Andy Newman (left), Vice President of Operations with Coast 101.1 FM. Newman wanted to explain some of the intricacies around advertising sales in the radio industry, while warning about the pitfalls of concentrating your advertising buy with one media outlet.

"Bottom line, many advertisers are being duped' into signing exclusive deals," Newman said. "Many are not getting what they were promised, and that is of most concern to those who have one or two day events once a year and depend on those events to pay the bills and are fundraisers We have also heard many stories about clients making specific purchases and not hearing their spots, only to discover the ads ran on another station and in one case, well outside the sale' window. I am sure you would agree that this is not good for any business, and is especially not good for radio as a whole. The marketplace had been elevated above the reputation of used car sales' but lately, with share prices and group profitability being a concern, we have seen a lowering of the bar'."

Yes, it is written from Newman's point of view and thus will reflect a bias toward his own business. However, it does contain useful information as well as insights into radio that I, being a print person, do not have. I know that other media executives will have a vastly different take on this, and I welcome them to add their comments below. It promises to be a lively discussion.

When Exclusivity Becomes Exclusionary

By Andy Newman

You've heard it countless times"give us all of your advertising budget and we'll give you a hell of a deal". It happens. In 95% of all types of media. It's the "exclusive". And often it's only beneficial to the media outlet.

In today's fragmented media marketplace, no one medium reaches every one of your potential customers 100% of the time, at the needed frequency. Take TV. Yes advertising on Station A's evening news reaches a hundred thousand people. But Station B reaches seventy 75,000 different people. Once you have spread your message to Station A's audience every night for a week, they have the message. Any more and you are preaching to the choir. You need to now talk to Station B's audience.

If you've taken an "exclusive" deal, you just keep talking to the same people. Yes, your ads are costing you less, but is it a good investment? Once these people have come to your store, or bought your product, the pool dries up. You need to talk to new people.

And if you are a non-profit group or community organization like a festival, doing an "exclusive" can hurt your ability to raise funds. Let's talk radio stations. On the Avalon there are four FM stations, three AM stations and three community stations. That's a ten way spit for about 250,000 people. If you go exclusive with one station or group, for your one-day event, you don't get a chance to reach the whole population. Based on some common Return On Investment formulas, you're missing out on a lot of potential customers, supporters or beer garden patrons!

Then there is the issue of PSA's or "freebies" from the other media outlets that you didn't buy because of your exclusive deal. Here is where the exclusion comes into play. If Media A have the exclusive, Media B, C and D will likely not give you any coverage in their entertainment listings or community events listings. Unfair? Sure. But only the CBC is run as a public entity the rest, are businesses, just like yours. It's quid pro quo. And more than one Community Cruiser or Road Show cruiser have been turned away from an event, because the organizers were pressured by the "exclusive media". Again, when you go exclusive, you are excluding a large group of potential customers, and excluding yourself from a lot of "free" media coverage. And with limited dollars, anything you get for free is good!

So what about buying every TV and radio and print property? Is that effective? Here is where is gets more complex. You need to know a couple of important things. Who is your potential customer and who listens, watches, reads the media you are buying? And just the "we're number one" isn't enough. Ask to see ages, genders, and even household income if it's important. And buy the mediums that make sense to your customer. You know your customer (or you should) better than the slick salesperson preaching the deal! And remember, 95% or more of the time, no one medium or outlet reaches your entire target, so why should you give them 100% of your budget? Look deeper at the deal. And you need to reach your target a minimum of three times with your message, so make sure the frequency of your media buy meets your needs.

Consolidation (of radio primarily) has created some interesting buying opportunities. But the concepts of reach and frequency still apply. And how BBM numbers are presented has become an annoyance for those in the industry and the "spin" basically has every station being #1.

Some definitions to note:

Reach/Cume means 1 person listening for 15 minutes per WEEK!

AQH is the AVERAGE number of listeners in a defined 15-minute period.

SHARE is a combination of the two above numbers, based on 100%.

TSL is time spent listening, a good indicator how often your message will be heard.

Central and Full Coverage are two market definers. Is it in the St. John's market or are the repeaters across the island included?

So, if you wanted to get the most effective radio or TV campaign (the same concept works for print and outdoor, but the measurements are a little different ) you need to look more at the AQH rather than the Reach/Cume. Think about it you probably flick through the radio or TV dial, so you count as one person listening for 15 minutes a week on a variety of stations but which one do you listen to the most? Which TV station and what shows do your customers watch or listen to?

Also confusing to the buyer is the market in which the ratings come from. For example, the OZ FM network covers the whole island, while Coast and Hits only cover the Avalon. VOCM can be combined for the entire island or broken out alone. K-ROCK is both the Avalon and the island. And sometimes stations will get grouped together, further confusing what the actual numbers are. Always ask what the market is, what the stations are and when the survey was taken.

While much of this applies to radio and TV in our market, the same diligence can be applied to print. There are now many choices in the print medium, vying for your dollar. Ask the questions! And reach as many people as you can afford, as often as you can!

The bottom line is do your homework! Advertising is often viewed as an expense, and it's easy to get caught up in price. Think of it as an investment, and be more concerned with results.

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  • Darrell
    July 27, 2010 - 14:53

    Great piece Geoff - kudos to Andy. From a print perspective this is also true (there's a ton of research on the multiplier effect of leveraging several media instead of just one). Because we've always advertised with ____ is something heard all too common and doesn't do justice to clients. Take the extra effort to learn new tools folks...you'll be surprised with the results.