Tuesday, October 13, 2009

Is Cume the Road to Riches?

Whether you love or hate Arbitron’s Portable People Meter, you have to admit it’s having an effect on the radio landscape. Like the diary, the PPM has prodded programmers to go for their masters in ratings maximization. A larger effect, however, is the change in formats that the PPM hath wrought.

The PPM has sounded the death knell for Smooth Jazz and Hot Talk. And lately, every time you turn around, Clear Channel, CBS or Cumulus is flipping a station to CHR.

The CHR format is providing some nice music these days, with acts such as Jordin Sparks, Kings of Leon, Kelly Clarkson and The Fray. Is this the reason that CHR stations have been popping up all over the map? Not really. The reason is the huge cumes that stations in the format have been racking up from the PPM methodology; and big cumes also boost quarter-hour numbers.

Will the giant cumes shown by the PPM lead to big billings increases among the leaders? My best guess is to some extent but not dramatically.

The greatly increased overall cumes might lift radio as a medium. For years, the Radio Advertising Audience has attempted to sell radio as a reach vehicle. After all, 92% of U.S. consumers still listen to radio every week.

As a buyer of radio, I have always felt insulted by the RAB’s reach story. The 92% is attainable if you buy every station. Unlike TV, where viewers watch more for programs than stations, radio listeners have music and information preferences and never listen to stations with other formats. Therefore, achieving a reach higher than 60% with most buys was almost impossible. Having said that, I want to stress radio does have favorable attributes, frequency among them, that the RAB would be better off touting.

The PPM methodology has increased the reach of radio. In light of that, radio might make its way onto media plans sooner. Countering that, however, is the fact that the same dollars now buy approximately 70% of the rating points reported by the diary.

Average quarter-hour ratings are the currency used by agency buyers. The buying goals provided by the planning group are expressed in rating points, and there is good reason for this. Average quarter-hour ratings are a combination of cume and time-spent listening; in other words, cume is already factored in. A tremendous cume can be a dual-edged sword. Together with a small quarter-hour rating, a high cume means very low time spent listening.

For years, I have heard radio salespeople complain that buyers ignore cume. I predate the PPM by many years and have always considered cume though not usually to select stations. I have used cume more to decide how many spots to purchase on a station. For example, I tend to put more commercials on stations with high turnover rates, i.e. high cumes and not-so-high quarter-hour ratings. For mass-appeal ad campaigns, I sometimes use high-cuming stations as a base and add stations having high duplication with these base stations, in order to achieve both reach and frequency.

My experience at big ad agencies has been in the planning, not the buying, area. The buying group implemented media plans that I wrote. What I saw at these agencies was this: Buyers were typically very young people earning low salaries. These folks were under incredible pressure; having to knock out 8 markets in a morning was not unusual. It’s no wonder that radio buying had turned into a mechanical process: Contact the top stations in average quarter-hour share, calculate the costs-per-point and place the buy.

There are exceptions to this. Some buyers at large agencies do request qualitative data on consumers of the products being advertised, and some do consider cumes.

Arbitron’s PPM ratings have shown greater compression among stations, meaning lots of stations very close or tied in some demos and dayparts. Radio salespeople tell me that the better buyers are using cume to break ties. I don’t totally agree with doing that because a large cume compared to average quarter-hour indicates short time spent listening. But cume should be part of the equation.

One thing that I have learned over the years is very few marketers know what they are doing although most believe they do. Therefore, selling high reach should benefit stations pitching their wares to small agencies and direct clients. And since small agencies and direct clients make up most of a station’s business, the high-cuming formats—CHR, AC, News—stand to gain from the PPM’s.

Whether the cume-leading formats’ share of billing will change significantly remains to be seen. But, some of the big radio conglomerates have been betting the ranch on it.

The Fan Soars, Relatively Speaking
You might remember the old saying about ratings, “Those who have them like them.”

WUVG-TV, Channel 34, is Atlanta’s Univision affiliate. Though the station subscribed to Nielsen, it would not give the ratings to clients. WUVG argued the numbers were flawed because Hispanics were grossly underrepresented in the sample. Unlike in radio, where the Atlanta metro is defined as a high-density Hispanic market, the TV market (a larger area) is not yet defined that way. Thus, Nielsen employs no special weighting procedures.

The above points are all valid, and WUVG’s audience is likely understated. By the way, did I mention Channel 34’s ratings were very small?

A funny thing happened. A few months ago, WUVG won a night in Nielsen. It didn’t take long before a message appeared in my inbox with words to the effect of, “We still don’t endorse Nielsen at this point, but we just want to make you aware we were #1 last night.” This was repeated several times over the next few months.

I recently requested a proposal for a client from 680 The Fan. The salesperson informed me, “I’ll get you the rates, but we no longer subscribe to Arbitron. (GM) David Dickey feels it’s flawed.” Yesterday, I received an email from the salesperson saying, “The station’s ratings are at an all-time high!”

When WCNN brought back its sports format, beating the entrenched 790 The Zone (WQXI-AM) took a few years. But 680’s advantage has been growing. The Fan’s September 2.2% share among persons 6+ is the highest in its history, up from 2.0% for August and 1.6% in July. The Zone’s 6+ share was 1.3%.

As a listener, I prefer sports talk hosts who are both talented broadcasters and knowledgeable about sports. In this regard, I have to give the edge to 790 The Zone.

The Fan has perhaps the market’s best sports host as far as broadcast ability in morning man Christopher Rude. But I find the show somewhat lacking in depth as far as sports analysis. Conversely, Chuck & Chernoff provide possibly the best content in the market. But they are somewhat less impressive as broadcasters.

Nick Cellini and Chris Dimino have a good combination of sports expertise first and broadcast talent. (Mayhem in the AM would be a better show without Steak in my opinion.) The 2 Live Stews are not for everyone, but they also are capable broadcasters and knowledgeable about sports. Even David Pollack, with strictly a football-playing background, has what it takes as a broadcaster.

The Fan has a signal advantage, a small one during the day and a big one at night. In this market, the 680 spot is easier to find although sports aficionados likely also have a preset for 790, nullifying The Fan’s slight edge. And The Zone’s 28,000 watts get out as well as The Fan’s 50,000 watts to the locations that matter.

At night, however, The Zone loses a good signal over a large portion of its daytime coverage area, with its power reduced to 1,000 watts directional. The Fan falls back to 10,000 watts at night and loses the areas north of its Peachtree Corners transmitter site, including Gwinnett County. The station also cannot be heard in parts of Cobb County. But it throws a strong signal over Atlanta and most of the suburbs.

Country Picks Up Steam
Clear Channel/Atlanta President/Market Manager Melissa Forrest started remolding 94-9 The Bull about 10 months ago, and the station is now a legitimate contender for advertising dollars and not just leftovers. The Bull owned 3.8% of persons 6+ in the September PPM report, pushing into the top ten. At the same time, heritage Kicks 101-5 moved up from 5.1% in August to 5.3%. Since June, the two stations combined have gained 1.4 share points.

Where did the increases come from? The semi-local country stations, The Legend 96.7, WNGC and South 107, lost a total of .5 points from June to September. That’s a net gain of .9 points for the format. Over the same period, CHR lost 1.4 share points.

Country is at least very strong if not growing virtually everywhere. In Dallas/Ft. Worth, KPLX is #1 although its total share decreased somewhat from August to September. In the Motor City, second-place WYCD-FM moved from 5.1% to 6% in the past month. In Birmingham, the two country stations increased their share by 39% since June. The format was stable and strong in the other markets that we checked.

Maybe it’s the Taylor Swift effect. Perhaps her popularity has attracted people to country music.

In the Atlanta race, while Kicks is still 39% ahead of The Bull in 6+ share, Kicks is only 13% ahead in the demo that many consider the most lucrative, persons 25-54.

Roddy Freeman

Thanks for reading. Feel free to email your comments or questions to roddyfreeman@bellsouth.net.

Link to Rodney Ho’s AJC Radio & TV Blog:
http://blogs.ajc.com/radio-tv-talk/

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