Service of Demographics in Radio Advertising

July 21st, 2009

Categories: Advertising, Marketing, Media, Radio, Target Audience

Matt Mecs’ comment to Jeremiah, who wrote “Service of Mature Music,” [July 16] was so insightful and worthwhile that it needed the platform of a post.

Responding to Matt’s comment, Jeremiah wrote: “I’d be a fascinated reader were you to write a post about ‘The Service of Radio Advertising.'” Subsequently he asked Matt to tell him more about the validity of the 18 to 54 demographic.

Matt has superlative credentials to address the topic and generously shared his views with us. He is vice president and director of sales for Local Focus Radio, New York and adjunct professor in media for the MBA program at Metropolitan College of New York.

Matt writes:

Jeremiah, you asked why A18-54? It has been that way for decades now, and does not take into account people living longer. Nor does it factor that baby boomers are the most affluent for their generation in history. Like the railroad and record industries, radio has stumbled badly keeping up with the times.

Like TV and print, radio has lost share in terms of ad dollars. There is that famous Wannamaker quote that “I know half of my ad budget is being wasted, I just do not know which half.”

In this hyper-niched, Return on Investment, quantifiable era of information, that no longer cuts it.

Internet will continue to take an ever-growing share of ad revenue. For example, if you log onto Rachel Ray’s website, not only will marketers know which site you came from, and which site you went to afterwards, but they will also know if you print out a recipe, what zip code you live in, your probable income, and so forth.

For an advertiser’s point of view, compare this to spending millions advertising on a TV show. With Tivo and DVR your commercials have no guarantee of being seen. Or radio stations running 10 commercials in a row – like anyone in their right mind would listen to that?

I met an owner of one cell phone company who will pay you .2 cents if you have an ad playing on your cell phone. So, if I call you, instead of hearing the ringing, I might hear a 5 second ad for the NY Philharmonic. The cell phone company gets .5 cents per call, so makes a huge profit % wise, and the client (Philharmonic) knows that their ad is actually being heard at a minimal cost.

This is tremendously tacky and sure to annoy your friends but it is these interesting new business models that might in 10 years time from now appear to be normal.

For instance, Google has sold ads in people’s private emails for approximately eight years now, so if you write to a friend in a “private” email about going to the Delaware Water Gap, you might see an ad for Delaware car insurance on the side of the page in your email. This raised a huge fuss as an invasion of privacy when it was introduced as a business model because computers were “reading” your email, but now it is just business as normal.

My mother is 74, and cannot imagine life without her New York Times in print (not on computer), listening to WQXR, and drives me to insanity with her inability to use her cell phone, or email. As she is retired, she is fairly careful with her money, and has her definite brand loyalties. You can see from a business point of view that she is a nightmare for advertisers to target, and they mainly do so through print, such as AARP The Magazine, with pharmaceuticals being the largest spenders.

Pharma has a tough time advertising on radio because they have to have at least a 10 second disclaimer (which might be sped up to sound as gibberish) and is particularly tough with the move to 30 second radio spots as opposed to 60.

In fact, radio stations are now selling 3-5 second ads (maybe a quick “come to Burger King,”) because they know that people have much shorter attention spans these days.

I got my MBA last year in marketing and am looking to get into internet marketing, but coming from a radio background, and in my mid 30s, I am seen as a bit of a dinosaur as well. This sounds melodramatic, but I go to networking events where cocky 20-somethings have exciting business plans, money from venture capitalists, and speak a jargon that I can only vaguely follow. When I say I sell radio time, I just get a patronizing look.

Radio will always have a place in small-town rural America, particularly with certain loyal formats that take pride in having a place in the community. Examples are country music (the most popular format by number of stations), African American and particularly Hispanic stations. Joe’s car dealer does not care about ratings, just about customers coming through the door. Unfortunately, classical stations are dying around the country, because while the listeners have money, there are just not enough of them, and there is no way of proving to advertisers that their message will be heard.

For big cities, where expenses are magnified, we will see more and more obscure and different ways of “breaking thru the clutter.” My old office building (before the radio company I worked for went bankrupt) at a prestigious mid-town Manhattan Park Avenue address sold a wall mural to Timberland shoes that was about 20 ft. by 20 ft. It was up, generating income for the building and exposure for Timberland, for a couple of months.

These are just a few random thoughts about demographics and the radio business!

If you have questions for Matt, fire away! How would you reach his Mom if you had something to sell?

5 Responses to “Service of Demographics in Radio Advertising”

  1. David Reich Said:

    Yes, like other “mainstream” media, radio is having a tough time. In many cases, it’s the stations’ own fault. Radio’s great strength was its use of local personalities. You could buy a spot on a local station and get it read by the local DJ who had enormous credibility with his or her listeners. If well written and well delivered, an announcer-read ad could seem like an old, trusted friend telling you where to get a good shopping deal or for great food or to get the best service on your car.

    In too many markets — certainly the big ones — those times are gone. The giant companies who own multiple stations in a market program from playlists compiled by computer in Texas, with minimal personalized talk by DJs and zero personality. Once the FCC took away the mandate to carry news and public service programming, many stations eliminated that programming, sticking only with music and ads.

    In smaller towns, radio often fulfills a role of more than a free jukebox. With local newspaper coverage disappearing, local radio stations offer local news, weather and community happenings. Even in this economy, many of those small town stations are still thriving — because they offer listeners a real valued service.

  2. Jay Ehret Said:

    Matt exaggerates a little here and uses an unfair comparison. Visiting to Rachel Ray’s website is not the equivalent of running a TV on a major national network. Can you tell me whether or not I just saw the banner ad on Rachel Ray’s site? And then the statement “no guarantee of being seen” over-extends the use of hyperbole. Of course there is a guarantee of being seen. We know how many people watch a show live and we know the DVR penetration rate.

    But the fact remains that things are changing. You can’t advertise the way you used to. Traditional media is not what it used to be. But neither will online media in another 20 years or so.

  3. Matt Said:

    David makes the main point – radio’s best strength is localism, (until it got seduced by Wall Street…) Clear Channel going bankrupt in 6 months?

    Jay also makes a great point of how can advertisers be sure that people are actually seeing/hearing their ads? One of the fastest growing fields % wise are commercials in movie theaters – people cannot change the channel, and you have a pretty good idea of the demographic coming to see an art film as opposed to Borat.

    The problem with TV is that it costs 10s of millions to produce a show that people are watching on demand and fast forwarding thru commericals. Eventually advertisers will grow dissatisfied with the ROI. The problem with facebook and You-Tube is no one can effectively monetize its huge audience yet. What are advertisers to do???

    Things have changed a LOT in media since 1995, and it will be interesting to see what the next 14-15 years will bring.

  4. Jeremiah Said:

    Matt,

    Your superb post fascinated me. It was all I could have asked for. Not having a marketing background, I only guessed how the pros go about suckering us foolish consumers into buying stuff that we might or might not use.

    In one sense, little has changed since the days when the Doctor Dulcamaras of the world passed off bottles of rot-gut Bordeaux as elixirs of love to the innocent Nemorinos, but in truth, far more than I suspected has. You have fleshed out in quite graphic detail how it works on radio, which unfortunately doesn’t make me feel any better about what is happening to WQXR. But what disturbs me most, though, as a consequence of your post, is the growing inability, as you point out, of people to understand each other because of the rapidity of change, in everything from language, to what people know or are taught, even to how they think.

    A communications and marketing case in point turned up here yesterday. My printer and computer are close to 10 years old. One has collapsed, and the other is struggling. We have a wonderful young man who fixes computers. He looks 18, but is maybe a little older. He is polite, gracious, and deferential, and very good at what he does. (He is also hard to get a hold of because he is so competent.) He speaks clear, understandable, accent free English, except when he gets near a computer when he becomes sufficiently unintelligible to a layman of a different generation that he might as well be speaking Basque. In conversation while he was working, I happened to mention the name of a controversial 20th century U.S. President. He’d never heard of him. Likewise, he mentioned a slew of things, I’d never heard of. It turned out that it would be less expensive to replace my wonderful, expensive when bought, old printer, that to fix it.

    (Hark! The marketers’ dream, I was a needy consumer with an open mind.)

    I asked the IT man what I should buy. He answered that because printer manufacturers make their profit from selling ink, they make all their printers as cheaply and shoddily as possible so they must be replaced frequently. They also change models as rapidly as every few months, so that consumers are left with more obsolete ink cartridges and other paraphernalia that they have to replace. He then refused to recommend any printer and said just buy cheap.

    (Hark! Printer manufacturer, had you advertised on WQXR, you would have made a sale.)

    Jeremiah

    PS: Tell your mother I won’t use a mobile phone if I can help it either.

  5. Matt Said:

    Jeremiah,
    Ah, the concept of loss leaders, especially with printers selling at under cost, and then cartridges at huge mark ups…Definitely worth another post. I have an Epson myself – one of those all in one – scanner, printer, copier, etc. About $35 at best buy. So far I have been happy with it.

    Luckily, the magic of word of mouth will never change. Be careful for fake blogs though (hidden endorsed blogs – known as “flogs”) It is certainly no different from magical elixir sellers…

    The more things change…

    Cheers!

Leave a Reply


Clicky Web Analytics