It is fascinating to see the jockeying going on in Los Angeles as Nielsen continues to dig into the meters to determine what went wrong. In a story that has now moved any remaining controversy about Casey Kasem’s illness and passing off the front page, all attention continues to be focused on the efficacy of the ratings, specifically in the L.A. market.
But around the country, broadcast professionals – from the corner office to the air studio – are wondering how one household (or even two) could wreak so much havoc in the nation’s second largest market. If it happened in L.A., it could happen anywhere. And if one residence can affect a market the size of Los Angeles, what impact could a single family dwelling have in Charlotte. Or Milwaukee? Or Cleveland?
Is the lesson here that Nielsen had better police its system better? Or that it must increase its PPM sample size? Or that broadcasters are paying too much for ratings that are increasingly unstable?
Or does the power of one household to have this type of effect on the ratings suggest something else entirely?
Maybe – to turn the phrase – the fault is in ourselves, not in our stars – or in this case, the ratings.
That’s not to say that Nielsen isn’t going to have to come up with answers to what apparently went wrong in L.A. But when a system covers 48 markets and thousands and thousands of families, there are going to be some improprieties, scamming, and problems along the way. There are holes in every fence.
That’s why perhaps the lesson in all of this is how we in radio use the ratings. While advertisers may parse them down to the tenths and hundredths in order to make their buying decisions, the fact is that many broadcast teams do the same thing when it comes to making programming, strategic, hiring, and firing decisions.
How often has a format change or staffing purge taken place based largely on a ratings weekly, monthly, or quarterly, only to see those numbers reverse before the new format or programmer is even in place? How many bad decisions get made on the thin line of the ratings, often because of a literal interpretation of the Arbitron… and now Nielsen numbers?
I’ve been on both sides of this ball, winning and losing some, and when a situation like L.A. happens, it is a sobering reminder of the fragility of the system.
And while the traditional ways of measuring audience perceptions may have fallen behind the modern-day real-time meter technology, the fact that a single household can change the order and shape of the ratings – and the careers of many – is something that Nielsen cannot fix or correct, even if they are somehow able to ensure the validity of every single meter holder in their system.
And sample stability isn’t going to occur even if Nielsen adds a few hundred meters per market. Researchers will tell you that statistical confidence typically requires sample sizes to double or triple in order to make a difference. Even if Nielsen is able to better police and monitor its PPM families, the ups, the downs, the dips, the spikes, and the weirdness will continue. Every quarter, month, and week.
It comes down to station management teams, cluster managers, and owners either having the confidence in its products and its people or not. Nielsen cannot possibly provide that guidance. It comes from that internal knowledge and discipline that you’re building a bona fide brand, that you’ve seen evidence in multiple research settings that you’re for real, and that advertisers see the results when they invest in your product and your people. If you’re looking for validation in the ratings, studying the often unpredictable variances from month to month ought to tell you that you have a star role in a fool’s game.
It’s become something of a joke, but the ratings are just estimates. When something goes very wrong, there are always going to be managers screaming for someone’s head (“Someone has to pay for this”), whether it’s the Veterans Administration or General Motors,
But the fact is that the weakness and irrationality that surround the ratings often lies with the end user.
All of us.
Jacobs Media has consistently walked the walk in the digital space, providing insights and guidance through its well-read national Techsurveys.
In 2008, jacapps was launched - a mobile apps company that has designed and built more than 1,300 apps for both the Apple and Android platforms. In 2013, the DASH Conference was created - a mashup of radio and automotive, designed to foster better understanding of the "connected car" and its impact.
Along with providing the creative and intellectual direction for the company, Fred consults many of Jacobs Media's commercial and public radio clients, in addition to media brands looking to thrive in the rapidly changing tech environment.
Fred was inducted into the Radio Hall of Fame in 2018.
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I’ve lived this nightmare at a classic rock station in a market where Arbitron just couldn’t seem to get 23-34 men to agree to fill out diaries. Our ratings were stable in every demo but that one, which at the time pretty much made or broke success for a classic rock station. We had an enlightened owner so to your point, we did regular research, and supported our brand with lots of marketing, so we were never forced to wonder if Arbitron reflected reality. We also had a pretty good programming consultant whose name escapes me right now.
Fast forward and most stations don’t do any research or marketing. The ONLY indicator of how they’re doing is the ratings and some companies don’t even subscribe to them. How is a programmer supposed to gauge what they’re doing with a pin the tail on the donkey strategy.
Good discussions and even arguments can be made about streaming and what to do with it, but most radio operators are flying blind with their terrestrial properties and not maximizing their potential. They’ll defend them to the death against a performance royalty but refuse to provide even a modicum of the kind of support that most of their clients use regularly. How can a radio station credibly tell a prospect how important advertising is tho their success when they don’t do it themselves?
I agree that taking the kind of estimates that Nielsen provides too seriously is as big a mistake as ignoring them, but in the absence of anything else to monitor results, what other measurement does a typical PD have?
Bob, you are correct that without perceptual research, the ratings are the only barometer of success. But even WITH proprietary research, the ratings trump everything because of their obvious impact on revenue. It’s always been a tough challenge to weather the Arbitron storms, and now the Nielsen ratings, but that’s ultimately the mark of an operator that is able to attain insights and has the courage to stand by their brand. It’s never easy, and when you get a steady, consistent downtrend, it’s irresponsible not to do SOMETHING. It’s the bad monthly or even the bad book that’s the issue here, and as we learned in L.A., it doesn’t take much for that to happen.
Thanks for the comment.
Fred,
As friend and long-time radio guy Bill Figenshu(Viacom) told me during one of my first PD jobs “don’t worry…it’s only our careers”. We see this stuff every month in Chicago. Panel changes cause fluctuations. Some stations have their day on top, then several weeks of fluctuation. And let’s not forget that, in the old days(pre PPM) we told managers not to react to “monthlies”…because the sample wasn’t complete. Now we call them “books”. Not to mention the weeklies. Frightening.
Frightening, it is. But as former NFL legendary coach Bill Walsh used to say that when all the fundamentals were in place, “The score takes care of itself.” Easier to say, and harder to live by. But in fact, that’s the challenge facing many radio managers and owners in this difficult measurement environment. Thanks, Jack.
Fred, we were having an interesting discussion about this on Facebook yesterday. My concern is that even if Nielsen were correct, what it measures is becoming increasingly meaningless.
At the end of the day, what advertisers care about is ROI. How much do they spend on advertising, and how much revenue do they gain in return? For decades, advertising ROI was impossible to pin down, so advertisers relied on whatever data they could get (cume, AQH, TSL, etc.) and drew inferences from that. But better data gathering and more sophisticated marketing tools, from Google Analytics to marketing automation software, are making it easier for other mediums to demonstrate their ROI, while radio still fumbles with Nielsen ratings. This latest incident only underscores the point.
Moreover, because Nielsen only aims to measure audio coming through a transmitter, radio stations have a myopic focus on an outdated technology instead of innovating with other audio-delivery technologies. I think radio’s Nielsen addiction is killing it, and the best thing radio could do is get rid of it and find a ratings system that demonstrates ROI. Of course, radio hasn’t gotten the stomach to do that.
Seth, thanks for the comment – and the acknowledgment that these types of conversations are happening at the station level. I think that’s a positive.
As you point out, advertisers – more and more – are looking for some kind of accountability. In Techsurvey10, we asked respondents about whether they would be willing to register in order to listen to their favorite station’s stream. Nearly three-fourths said they would do this, opening up the door for radio to be more competitive in the changing ad marketplace.
Nielsen IS working on merging the terrestrial with the streams, and a solution cannot come a moment too soon. In the meantime…
Thanks for taking the time.
Bravos, Fred. Clearly, a good post on an important topic.
The smart bet is Nielsen will, thanks to this brouhaha, improve sample recruiting and monitoring. Sidebar: all audience research used in advertising is getting a major rethink. Example: 3MS (Making Measurement Make Sense) seeks to develop new standards-based metrics in the digital media. Let me suggest Nielsen will be a player in this ongoing rethinking and likely emerge a leader of innovations, improvements in “audio” measurement. This should be a net gain for Radio.
The real lede here is “It comes down to management teams…and owners” What we have here is a leadership issue.
The sales teams which once bought programmers the time to develop audience in a format battle have too often become the arbiters of format (e.g., “We can’t sell this anymore. Can’t make our numbers”). One need look no further for examples than killing a format without competition (Beautiful Music, Smooth Jazz, Alternative et al) to make an irrational jump into a vogue, albeit competitive, space. How many sports stations can a marketplace support? The reality is sometimes it’s better to be second or third in a popular format than exclusive in one which is difficult to position and sell.
Audience and sales development needs to be high on every owner’s agenda.
Let me leave you with another Gordian knot. On the horizon is programmatic buying and while not a new concept, it’s gaining traction. The days of presenting, talking about your numbers and telling your story may soon pass. The trend is to take friction out of the media purchase. Selling as science without the art. This potential major disruption of Radio’s principal oxygen, transactional revenues, deserves some serious thought and pre-emptive action.
I agree that the future is in turning sales into science instead of art. A few years ago, I was in the conference room at a company where the marketing team was reviewing a spreadsheet. They knew where every marketing dollar they spent went, and what the return on each was. They were comparing marketing channels against each other and had an incredible amount of data at their disposable. This is a hard thing to do, and few companies are that sophisticated, but it is coming.
I would like to see radio move away from salespeople altogether. I don’t need a salesperson to run a Google Adwords or Facebook campaign; I just set it up online. I don’t see why radio couldn’t do something similar — just upload your spot, fill out a form and charge your credit card. If the ratings data were more transparent (and trustworthy), this would be a lot easier.
Seth, I think for radio, it should work both ways. There are upsides, as you suggest, to automated selling. And to a great degree, that’s how a lot of national business is purchased. But integrated programs (with digital tools), live reads, and on-site promotions are all assets that broadcast radio should continue to market. There’s money in it AND it sets strong, aggressive brands apart. Thanks for continuing the dialogue.
Dave, thanks as always for the insightful comments. To your last point, that’s something Seth Resler discussed in his comment, too. If radio allows the sales process to become that automated, it misses out an incredible opportunity to monetize its truly unique assets – what sets it part from pure-plays and most other competitors.
You are correct that the “sales tail” has been wagging the “programming dog,” and the results have not been good. As you suggest, formats that were viable have become extinct. And somehow there are problems selling desirable formats anyway. I continue to hear that essentially half the population – MEN – have become increasingly unsellable. It’s not a good situation, and all the Nielsen improvements in the world can’t save an industry that cannot effectively market itself.
Thanks again.
There will always e a place for salespeople that can identify and solve problems. If the goal is just to purvey media meat then yes, the seller and their compensation is expendable.
Radio has IMO managed to push the problem solving salespeople out by paying them less, making working conditions difficult and forcing non competes that pretty much preclude upward mobility without moving to another city.
FWIW, ratings killed the dead formats mentioned, not salespeople.
I do think there will always be a place for salespeople — even Google has salespeople — but that they should be reserved for only larger clients that require customized packages. I believe that the biggest threat to radio on the sales side comes from Google and Facebook, not Pandora, Sirius or Spotify. To remain competitive with these companies, I think radio should make it possible for clients below a certain spending threshold to place orders without requiring a live salesperson. This isn’t being dismissive of the role of salespeople. Rather, it’s saying save the sales talent for the really big clients; don’t squander it on the little ones.
From what I can tell (and Fred and others here would know better than me), radio is not up to speed on a lot of online strategies that could streamline the sales process, including marketing automation, lead scoring, and lead nurturing. I’ve seen radio station websites where its difficult to find an online form to fill out if you want more information about advertising (and if somebody does fill out such a form, they should get a phone call back within five minutes).
I’ve spent a lot of time in Silicon Valley these last few years, where “scalability” is a key word used to describe startups. If every sale requires a discussion with a live salesperson, it’s much more difficult to scale up your operation. Turnkey sales, a la Google Adwords or Facebook ads, will enable radio to stay much more competitive.
Seth, I’ll let Bob get back with you on these points, but as mentioned in an earlier comment, it strikes me that radio could benefit sales-wise from a balance of automated selling and the personal touch. Isn’t that what’s happening with the auto industry? Some customers would love to do the entire process online without interfacing with a salesperson. But others (and in fact, it may be generational) appreciate talking to a person about the product. It is to radio’s advantage to provide both.
Radio tends to suffer when it applies other models to its way of doing business. Compliance with Wall Street metrics really hurt radio and so will Silicon Valley’s if radio tries to adopt them.
Automated selling success presumes built in and pent up demand for a product. There is less and less of that these days for radio, so automating the sales process won’t help anything if only few people wake up and decide they want to buy some radio today. Its like adding units to a station that isn’t selling the ones they already have.
As for competition, its not very productive to try to presume who is or isn’t your biggest competitor as those discussions typically lead to price fights from which there is no winner. All media is competition for time and dollars.
I agree that resources should be applied to radio’s biggest customers – too many once a year advertisers often get too much promotion, but that’s different from automated selling…an oxymoron if there ever was one. Radio needs to up its sales profile, not eliminate it and automating radio sales could be the quickest way to transform flat to down IMO.
Bob, you’ve got a good point about pent-up demand, which could influence the success of automated selling. I think one of the reasons radio doesn’t have pent-up demand is because while stations typically market themselves to listeners, they often don’t market themselves to advertisers. There usually isn’t a division of the marketing department tasked with finding and qualifying a steady stream of leads for the sales department to work on. My guess is that many stations still have sales people who prospect the old fashioned way — looking at who is advertising on other media outlets and trying to change the buyer’s mind after they have already made their purchasing decision. At this point, the customer is too far down the sales funnel for a salesperson to be effective. Radio stations have got to get to the prospects earlier, and there are a lot of tools and processes used by other B2B industries that could be effective here. In short, one of the reasons radio doesn’t have pent-up demand is because it’s not creating demand.
I think advertisers are going to force radio to adopt Silicon Valley metrics anyway, so the sooner it adopts them, the better. The single most important metric here is ROI (which is not unique to Silicon Valley): how much do I spend and how much do I make in return? AQH, Cume, TSL and all of our other metrics are only useful in so far as they can be connected back to ROI (hint: not very well). Meanwhile, Google in particular offers both a suite of free data tools (Google Analytics, et al) and a more flexible pricing model that makes testing and measuring ROI much much easier. Add in a simpler, faster purchasing process and this becomes a no-brainer for local advertisers focused on ROI.
I suspect a lot of the business that radio manages to get comes from buyers who are less data-driven and less tech savvy. Yes, good salespeople have more influence with these types of buyers. But the overall trend in marketing and sales will be to use more data (call it the ‘Nate SIlver’ theory), and that is going to decrease the influence that even good salespeople have on the buying process in the long run.
To your last point, I think it’s been a conspiracy of ratings and the inability to sell and market formats. But that’s for another day and another post.
We’re in agreement that salespeople can be effective, but they need to be passionate, smart, motivated, and good listeners who are dedicated to solving problems rather than “hitting goal.”
Thanks, Bob.
It is not just a household that is involved in chicanery, it is the impact of 1 household In SF a low power channel 6 TV signal with a transmitter literally in the basement of someone’s hone with an antenna attached to the chimney scored better than a 3 share in 25-54 persons. The audio only programming was K-LOVE. One household in the hills near Santa Cruz was responsible. There
was no rules violation and we know K-LOVE has an audience. But this is market #4 and one HH had that much impact( 3 share 25-54 in SF is a big number. Could even be top 10-12). Was it a fair estimate? No. Was it
sustainable? No. Did it help or hurt K-LOVE? No. But since share is a net sums stat it undervalued shares of
other stations. Perhaps causing the disturbing reactions you discuss. So one PPM household can distort ratings even more than way back when Arbitron did 4 weeks of diaries twice a year. So don’t just look at your numbers and your direct format competitors, look at stations at the bottom who suddenly rise or fall. Check total format ratings changes for drops and gains because a rising tide lifts all ships as does low tide drop than. Then always check panel change data.
Good advice to be sure, Bill. They have a lot of markets to police – another reason why having confidence in your plan is key. Thanks for chiming in.
Despite all the troubles with the Rating system – there is ALWAYS a top station in every demo segment every week, and every month. In some cases those winners continue to win quarter to quarter – year to year.
I’ve never met or worked for a Radio management or programming team that didn’t expect or demand that winner be us.
Great Brands and entire Formats have vanished because of this system. I’m pretty sure the people working those Brands and formats “believed” in them. I know the power of belief can help float Brands through rocky early goings (I’m on my second station launch being buoyed by belief right now) but eventually – the meters/daries must validate the belief because that is the game we’re all playing. Let’s not kid ourselves – especially in top markets where the vast majority of revenue is bought on rankers. We absolutely let Neilson validate us – because that game is where most of the money is.
We don’t really get paid to create “great radio” – we get paid to play the game and win our designated battle no matter how flawed and un-fair the score-keeping may be. Because every single month – someone wins.
I don’t have to like the kind of Radio this system seems to demand. I don’t have to believe or like this game itself. But it’s the game I agree to play every time I cash a check from a terrestrial Radio Broadcaster. Hoping it improves is great. Talking about ways it can improve is great. Winning this week’s survey – mandatory.
That’s life in the trenches.
Spot-on, Jeff. A PD’s job description can be reduced to six words. Deliver numbers to the sales department. Broadcasting is a ratings driven business and, as a general rule, the “best” (i.e., most productive) sales departments are found at the top-rated stations.
“Great brands and entire Formats” have also vanished for a variety of reasons other than ratings performance. The influence of herd instinct as formats fall out of fashion, ownership preference/expertise in a particular format or business model, etc. Simply put, a format is a business decision. Box office matters.
My concern is what happens at the stations which are not ranked in the top three of a demo? There was a time when it was not unusual for a station or cluster to generate better revenues than competitors with better ratings. Invariably, it was a talented, hard-working, creative sales team who was responsible for producing those results. Truth be told, a great many of the so-called legendary radio stations of our day owe their sustained run, in large part, to their sales departments. We may not always be rated top five but we always have numbers to make. A great sales department makes the difference, makes things possible for programming.
That’s an excellent point, Dave. So true.
Achieving Rank is table stakes to the “default demand” agency cash everyone is after – but after that – it’s jump ball. So many stations out-bill their rank and many more under-bill theirs.
That inevitably influences programming decisions. Ying, Yang – inter-dependance. All very true and too often under-appreciated.
Jeff, mediocre sales does more than just influence programming decisions. A shortfall in revenue – that is, sales that don’t match the ratings – is truly erosive, forcing cutbacks in staff, research, marketing, and even company focus. It can be insidious because lack of support in programming this past decade can be traced more to sales failure than to greedy corporate goals and all the other things the pundits say are wrong with radio. A bad sales effort is like rust. It totally corrodes the product.
I would add two words to your PD job description, Dave: Or else.
And sadly, delivering leading ratings is no longer the key to winning the sales game because the mantra, “get the ratings and the sales will follow” has been flipped upside down by the rampant choice and options available to media buyers everywhere.
As for those stations that don’t hit the top three in a demo. They are almost always screwed, because those committed, passionate sales people who truly believed in their station are becoming extinct.
Great sales staffs can sustain a station for a year, maybe two after a fall from ratings grace. After than, things begin to fall apart. The better the ratings, the more a great sales staff can outperform them in my experience.
I’ve worked at two iconic radio stations when ratings had fallen way behind legend and no one cared about the history except radio people. Can anyone cite a station that succeeded with “the station you grew up with” kind of imagery? Whether its CHR or Classic Rock,, listeners or advertisers, radio is a what have you done for me lately business and I think that’s a good thing. Its not about what you meant to someone, its about what you mean to them right now. Be relevant to your audience and you’ll get ratings…solve problems for you clients and you’ll make sales, but you can’t solve problems without an audience.
You’ve summed it up well, Jeff. Every game has its rules. We don’t have to like them or even agree with them. But when we put on the uniform every day, we agree to play by them.
I do believe that – by and large – those stations sitting up at the top of the heap, month after month, and sometimes year after year, are there for a reason. You cannot be run of the mill and succeed over time, even a system like ours. “Great radio’ is in the eye of the beholder. But #1 in the ratings is indisputable.
Thanks to you, Dave Martin, Bob Bellin, Seth Resler, and others for making this post come to life.
This has been a problem since I started in radio in 1977. Operators don’t really care enough about accurate ratings to pay for them back then. And, until the internet, it really didn’t matter because a couple of bad (false) books out of 10 wasn’t a big deal.
But, the internet changed everything just as the consolidators arrived to pare costs. And, as groups got bigger and sold bulk inventory (4 stations combined or even 104 stations combined), ratings for one station in one market didn’t matter.
So, it’s no surprise that radio loses respect among media buyers and that as much as 40% of ad budgets are now going to the (relatively) more accurate online measurement of digital..
This issue with Neilsen is NEVER going to change because no one cares enough to do anything about it. Sorry to say this. It just happens to be true.
You get what you pay for, John. It’s as simple as that. Thanks for the perspective…and the truth.