Why Make Radio Advertising Harder to Buy?

The headline in Radio Ink proclaimed, “No More Free Ride For Non-Subscribers.” It was a news story about how Nielsen Audio was no longer going to provide buyers with any data pertaining to non-subscribing radio stations through their ratings service.  It will be as if these radio stations vanished from their markets.

Ratings Gathering Costs Money

I can understand the perspective of both Nielsen Audio subscribers, as well as Nielsen itself as an audience ratings provider. If there weren’t subscribers there would be no money to pay Nielsen to gather this data in the first place. Subscribers don’t wish to see those radio companies not paying and then enjoying the benefits of data gathered. Likewise, Nielsen wants to be able to garner the biggest bang for their ratings gathering dollar by trying to force all radio operators to be a participant in the process.

So, on the surface, why would anyone object to this change coming in January 2021?

Winners & Losers

The reality is that even if everyone pays to have access to the data, only the very top performing radio stations will enjoy the benefits. Stations placing out of the top five or ten– often any station not rated number one or number two – will be paying for data that in the end only helps the market’s “big dawgs.” For many stations, it’s paying big money for nothing.

Nielsen vs. Eastlan

In those markets where both Nielsen and Eastlan measure radio listening, we see all the stations in the Eastlan report’s cover page giving a total radio listening perspective for that  market, but with a Nielsen Audio report, we only see subscribing stations. In 2014, Nielsen ceased reporting non-subscribing radio stations from the “topline” numbers it provides to the radio trade publications and newspapers.

For anyone who grew up in radio, having radio stations that are impactful in their market not be listed seems sacrosanct; like not seeing 650AM WSM appear in the ratings for Nashville. When this became Nielsen’s policy, I stopped looking at their ratings reports, since I knew they were incomplete and I’m sure I’m not alone.

Eastlan Ratings, on the other hand, includes every radio station in their topline numbers in every market they do audience measurement. However, if anyone wanted to drill down the data to a more granular level, then they would need to subscribe to the report, and that seems fair.

Of these two radio ratings companies, I find Eastlan’s philosophy to be more valuable to the radio industry and the selling of radio advertising.

Subscriber First

Nielsen is calling their new policy “Subscriber First.” But will the result be a positive for Nielsen subscribers if it makes radio advertising more difficult for people to buy?

Radio ratings are, after all, only estimates. Estimates of what people ages 6 and older are listening to on their radios, smartphones and other audio devices.

Unlike my subscription to Netflix, Amazon Prime, PBS, or The Washington Post, where I am actually counted as paying for a service that I receive, radio ratings are attempting to estimate listening based on a small sample of people, and then extrapolate those results as the habits of an entire marketplace population.

Radio listening estimates  are not perfect, and as a radio manager, some of my radio stations have taken a “ratings bullet” and seen a precipitous drop in reported listening, even when nothing in the market changed to cause such a drop. History taught me that patience was in order and that things would return in the next ratings period; which they always did.

Radio Station Owners vs. Radio Advertising Buyers

It’s radio’s buyers who really want to know who’s listening to what, and when, and for how long etc. And it appears that radio buyers, as a group, are none too pleased with this change in ratings reporting. I’m reading quotes like “as a long-time client, not being consulted before a final decision was made is quite troubling,” and “ we feel like we will no longer be receiving the data we originally contracted for – a full view of radio listening in measured markets.”

Radio station owners, on the other hand, feel that non-subscribing radio stations should not have anyone know the true impact their radio station is having in a measured market. Those stations should be made to “pay to play,” or simply disappear.

Customer Friendly?

It seems like the timing of this change could not come at a worse time for the radio industry. With so much of its business impacted by COVID-19, making radio’s reach more transparent instead of opaque should be the order of the day.

I’ve read that Nielsen estimates two thirds of its agency subscribers won’t have access to any data regarding non-subscribing radio stations. Might these agencies just also cease being subscribers to radio ratings? Is this really the direction we want things to head in?

I think not.

Nielsen’s change, from my vantage point, will potentially reduce the level of confidence buyers will have about buying radio advertising. It’s a path of erosion that could negatively impact the entire radio industry.

The Better Advertising Mousetrap

Ralph Waldo Emerson is said to have coined the phrase: “Build a better mousetrap, and the world will beat a path to your door.” When it comes to advertising, social media has built the better mousetrap, and you and I are helping them to improve it every day.

I wrote a blog article on social media’s ability to manipulate our attention, wants and desires for the benefit of their advertisers. It should give any radio broadcaster pause. You can read that article HERE

The reality is, today the internet is a more efficient way to sell our attention to advertisers.

When radio makes buying the medium more difficult, buyers have other choices, and once they invest more heavily in them, they may never return.

“There are only two industries that call their customers ‘users’:

illegal drugs and software.”

-Edward Tufte

11 Comments

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11 responses to “Why Make Radio Advertising Harder to Buy?

  1. This is a shortened Op-Ed I did on another board: This Nielsen mandate completes the cycle. It is business 101.
    National and regional advertisers don’t need you. They already have you… for free. When we load up our station with barter they have the market covered
    and they get a extra bonus when you deal barter and cash, that is insanity. IHeart and Cumulus thanks you. Every time a syndication outlet jumps up with a new program we get excited. You’re giving away your station. In reality, your listeners don’t care.
    In my opinion and to be fair there are some exceptions like N/T and sports formats. 3% of my programming (all :60 features) are sold locally. If it doesn’t sell, it’s gone. I have have one long form Sunday night show I’m dropping next Summer.
    That leaves me with 3 sixty second features weekdays.
    Sadly, the horse has been let out of the barn. Premiere and Westwood One are the most profitable divisions of I Heart and Cumulus, and they thank you. Why list our stations when we provide free advertising.

    Liked by 1 person

  2. Gord Williams

    Having had the opportunity to work gathering data for a certain company I can tell you pointly that some ratings are just not worth the money at all, given the malfeasance of those in charge of it. This is one company I know of well, but its still worth throwing shade on any of the others because of them. One bad apple does spoil the bunch given as I have seen the business model repeated over and over again.

    Liked by 1 person

  3. More little guys might consider paying if ALL stations were listed and a special report could match real coverage areas. Incomplete data is like publishing partial sports scores. Boston 7….

    Liked by 2 people

    • Excellent point Clark. Often survey areas were built around the big signal stations and little stations looked anemic (if they appeared at all) when in reality they had a local, loyal audience that depended on them every day.

      I saw how these stations were missed when Eastlan and Arbitron measured the same market. They usually agreed on the top stations, but Eastlan found listeners to the small stations that Arbitron never did.
      -DT

      Like

  4. Maynard Meyer

    My ratings are determined by the results our advertisers get when they are on the air. I don’t need an over-priced ratings service to tell me how we’re doing. 95% of our ad dollars are non-agency anyway.

    Liked by 2 people

  5. Gregg Cassidy

    I could go on for many quarter hours about Nielsen. Nielsen/ Arbitron, just like radio having been playing “technology catchup” for years. Cut the cord from Nielsen, Saga did, Congratulations! Even though we are in the infancy of streaming data at least it is 100% accurate. What’s even better than that guide, Hiring personalities that creat a buzz in the market. Sorry to say radio has given up on that plan. Be the market leader in playing the best music, the best marketing, create a buzz and the advertisers will climb on board. Radio has been wasting money on Nielsen for way to long. P.s to answer your initial question. Don’t spend another dime on Nielsen. Put that money into the product.

    Liked by 2 people

    • While there are those that have been quite successful selling radio advertising time without ratings, Maynard Meyer (see his comment above), the realities are internet based media — as you point out — provides real data about their abilities to influence an advertiser’s moving of product and services. Also, there’s no question about IF it was due to them the sale was made, there’s a direct link to the buyer through that internet connection. That’s pretty powerful stuff.

      I sense the window for selling without any kind of documentation of results is closing quickly in the 21st Century media world.

      Looking in the rearview mirror, thinking that if we only did what we used to do even better, would produce more results, is a pipe dream.

      As one of my readers asked, “is the moment of opportunity for radio to get with the program, already passed?”

      I fear, it has.
      -DT

      Like

  6. Mark Bass, Centennial’s Market Manager, has authored this response letter to advertisers regarding Nielsen’s new Subscriber First policy.

    October 29, 2020
    To; all advertisers
    From; Mark Bass (Market Manager, WBQB/WFVA Fredericksburg VA) Subject; Nielson
    As many of you already know Nielsen has changed the way it is allowing advertising agencies to view its data; you will now only see “subscribers” on Neilson ratings and no one else. We hope to address your concerns and questions in this document, as always please reach out if you need anything else;
    1. Why do we use another ratings provider than Nielsen? The “diary” method of gathering ratings is decades old, we wanted a more modern way of defining our audience that is why we are using Eastlan ratings service. They provide a larger sample size and they do not “weight” the corresponding demos when they cannot get enough of a response, it is just a better product
    2. How do you get a copy of the ratings from Eastlan? Just ask; the team at Eastlan will be happy to provide the data for the entire market and walk you through how to use the software, at ZERO cost to you.
    3. Why is Nielsen doing this? They are desperate, more and more broadcasters are turning to Eastlan or not using any ratings data. Large groups like Saga, Townsquare and many independent broadcasters like Centennial Broadcasting have dropped Nielson in favor of Eastlan. This is just an attempt to strong arm broadcasters into subscribing to their services.
    4. Why this is important to you; in some markets Nielsen may only have one subscriber thereby making the information completely useless when you are planning a buy. We know you want to do the best job possible for your clients, this game of “keep away” will do nothing but harm the market and Radio in general
    Thank you for taking the time to read this and thank you for your continued business and for your convenience here is the Eastlan ratings contact information;
    Scott Gilreath
    sgilreath@eastlanratings.com
    803-548-0899

    Like

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