JacoBlog - Jacobs Media's Blog

Buffalo's #1 Controversy

What is on the minds of Buffalonians these days?  It's not the economy, the war, the weather, or even a quarterback controversy.  Instead, it's why 97Rock chose "Sweet Emotion" as the #1 song in the station's annual Memorial Day Weekend "Rock N' Roll 500."

For one of those "evergreen" promotions that programmers often tire of, but listeners always enjoy, the "500" has become more audience-focused.

Stations have become more adept at integrating audience requests, but 97Rock has taken this to the next level by giving listeners a chance to sound off at the station's top choice.  Not only does programmer John Hager learn a little something about this feature and how his audience enjoys it, he can see the tangible emotions and passion that have propelled his station to top ratings in Buffalo for the past two decades.

But, hey, I couldn't have said it better than 97Rock listener Joe Kessler:

"Thank God we have a new number 1 song... the suspense was killing me! LOL"

End Of The (Land)Line

When the Cell Phone Only controversy took shape a few years ago when our first Tech Poll was released in '05, Arbitron's Ed Cohen told me that the nation's landline statistics were tracked by the National Center for Health Statistics.  I've never figured out why they're the ones that research this data, but nonetheless, their stats are out for the second half of 2007 - and the numbers continue to show a definite trend.

We talk about the wave that powers the meteoric growth of Google, iPods, and YouTube, but the quiet statistic that has impact for all of us is the steady rise of Cell Phone Only households in the U.S.  This new data tells us that about 1 in 6 homes in the U.S. only have a wireless phone.

And of course, the phenomenon is even more pronounced among 25-29 year-olds - more than one-third are now CPO.

Our new Tech Poll data shows even higher CPO numbers - clearly Rockers (specifically Alternative fans) are especially likely to be CPO, and therefore, not in the Arbitron diary process.  Researchers have argued about the effect of their exclusion from studies - ratings and otherwise.  But when large segments of the population are not a part of research surveys, there's something wrong with the process.

Gallup came to this realization last year, and you have to wonder when radio researchers won't have to reach that same conclusion moving forward.  As the NHIS notes, "The potential for bias due to undercoverage remains a real and growing threat to surveys conducted only on landline telephones."  Technology changes everything.  And market research is no exception.

Just like with iPods, this is a problem that is only going to get worse over time.

Eliot Spitzer Gives Back to Radio

Many have complained about Eliot Spitzer's vendetta against radio.  Today on the Arbitron PPM webinar, it was revealed that the Spitzer news translated into considerably higher ratings for both New York City all-news stations.  The Karma Train does it again.

If A Tree Falls...

Three years ago, this news story from late last week would have created massive "water cooler talk" in and out of radio:

"Stern Show Rocked By Lange Blowup"

In case you didn't hear (and you probably didn't), Artie Lange walked off the Stern show last Thursday after an incident with his personal assistant.  This would have been the radio buzz, but instead, the entertainment headlines were all about Michael Johns getting booted from American Idol, Katie Couric's status at CBS, and a new Keanu Reeves movie that opened this past weekend.   

It's about environment.  While Stern's CPA is obviously reading this blog and laughing, the fact is that by placing himself on a much smaller stage, Stern has taken himself out of the mainstream of American media.  People don't talk about his show because most of them can't hear it.  Compare that to his terrestrial radio reign where even celebrities who were terrified of him went on the Stern show to promote their movies, books, and sitcoms. 

We even saw this while working for Stern stations over the years.  On the really well-positioned, solid stations, Stern pulled in those boxcar numbers that everyone remembers.  But on the dogs - stations that were poorly programmed, also-rans, and or simply doing a lousy job - his ratings were not impressive at all.  Even Howard couldn't compensate for being on a losing team.

Many personalities and operators make these same faulty assumptions when analyzing talent and environment.  The aforementioned Katie Couric is either mis-cast on the CBS Evening News or the reality that she's moved from a great gig like Today to a much tougher putt in her new job is something that even she cannot overcome. 

Many have suggested that terrestrial radio needs Howard Stern, because few personalities (if any) have stepped into his void.  Or is that Howard Stern needs terrestrial radio?

This blog was inspired by KISW's Dave Richards, the guy who has most successfully replaced Howard Stern at his Entercom/Seattle station.  He's still a big Stern fan, by the way.

New Tricks

Contrary to what you may read, there's a lot of music being sold these days.  But much of it is not being sold in traditional ways.  As record labels lose their grip on the musicians and bands that used to be their bread and butter, music is being consumed in very non-traditional ways.

Of course, there's iTunes, but consider how much music is now being sold via TV shows.  Or songs that are purchased as a result of playing video games like Guitar Hero or Rock Band.  Or even the way that Radiohead is creating a new model by giving away their album, and letting consumers set the price.

Or the way that Eagles' manager Irving Azoff only offered Long Road Out of Eden at Wal-Mart.  Azoff understood Wal-Mart's great reach, not to mention how many shoppers buy products online.  Like Amazon, it's easy to buy CDs on Wal-Mart's website.  In a recent New York Post article, Azoff was asked what he was thinking when he put together the Wal-Mart deal, considering the chain has no New York City stores.  He mentioned the website sales, of course, but also pointed out that Virgin stores in NYC simply bought copies of Long Road Out Of Eden at Wal-Mart, and marked up the CDs to make their margins.

Again, in a rapidly changing entertainment world, this is more proof that non-traditional models can be effective.  Radio could benefit from these marketing "experiments" whether it's in the way we package, market, and build out advertising models for clients.  The days of simply pointing to a ratings book, and quoting a rate for spots are coming to an end.  Like Azoff proved with the Eagles, using a strong brand to sell products in non-traditional venues can be done.

It takes creativity, a sense of risk, and an understanding of the market.

Less Is... Less

As Clear Channel moves from the public arena to private ownership, how should we evaluate "Less Is More" as a strategic initiative to change the radio advertising model?  In a recent Wall Street Journal article, CEO John Hogan indicated that three years after the debut of "Less Is More," that program is "yesterday's news."

Claiming success with "LIM," Hogan noted higher ratings and new customers.  Many media buyers and other broadcasters don't share his view.  Clearly, the program didn't change the game.  In fact, many advertisers were able to buy :30s cheaper, allowing them to either spend dollars in other media (think Internet) or pocket the difference.

But the real target audience for "Less Is More" was Wall Street.  And we can clearly see how impressed the markets have been with radio stocks.  There's little doubt that flash and trash tactics won't move stocks anymore.

That's why you have to hand it to an operator like Cox's Bob Neil.  With little fanfare, his stations have systematically cut back on the numbers of minutes they run, and the result is a more seamless, less annoying listening environment.

No gimmicks, no games.  Just giving listeners what they want.

Gallup & Cell Phone Only

A funny thing happened while I was reading the latest USA Today/Gallup poll.  Just like always, Gallup interviewed a representative poll of about 2,000 adults in order to determine American attitudes about the candidates and the country.

But in a small box, Gallup explained that for the first time, they are now integrating "Cell Phone Onlies" into their national samples.  In fact, for every 1,000 interviews, there are now 130 CPOs in the sample.

On the one hand, Gallup notes that the effect of excluding those without landlines from research studies is negligible.  Yet, after reviewing their procedures, they feel the need to include CPOs in their research.  (By the way, once they find a CPO, they ask "For your safety, are you currently driving?"  If the answer is "yes," the interviewer finds a better time to make a callback.)

Since we raised the question about the Cell Phone Only dilemma after our first Tech Poll in '05, this situation has become a research issue.  This is a growing population group, and they need to be represented in important research projects.  In this blog, we have urged research companies - beyond Arbitron - to start including CPOs in their studies.  Of course, this includes radio research companies - the ones who help us determine audience needs and tastes.

Now Gallup has stepped up to the plate.  Who's next?

Granularity

One of the many promises that Arbitron has made about PPM is its ability to drill down into specific programming components to determine their true ratings value - or lack thereof.  They call it "granularity" - which translates to being able to hyper-focus on specials, features, stunts, sporting events, and everything else we programmers cook up in order to generate ratings.

In the diary system, there is "negative granularity."  A great stunt, a week-long cash giveaway, A-to-Z, and other gems often seem to have no impact on a given week, much less during the month in which they occurred.  A couple of years ago, a client of ours meticulously broke down each weekend of the book after scheduling some compelling special weekends.  The net result was ambiguity and confusion.  There was simply no rhyme or reason to why one weekend seemingly outperformed another.

But in last week's conference call dedicated to PPM, Pierre Bouvard provided attendees with another example of granularity from the Philly market.  In breaking down that almost-historic Eagles-Patriots game from November, you can see the kind of tune-in, tune-out, and in-game ratings that are just not possible with a diary.

While not in Pierre's presentation, a look at the recently released December '07 numbers in Philly shows gigantic gains for Christmas music on B101.  While I hear a few "Duh's" with that news - B101 is a great station, they market their holiday music, etc. - the takeaway about this data is that PPM truly measures programming reality.  If it's good radio, if it's a franchise, if it truly captures the interest of a market, it will show up big-time in PPM.

Are there problems with PPM that Arbitron will have to iron out?  Most definitely.  Much of the Arbitron call was devoted to sampling efforts and issues, especially with younger cells.  There are ongoing challenges regarding reaching "Cell Phone Onlies."  And the question mark, of course, is how to translate those monster cumes in PPM into a highly saleable benefit in the advertising world.  2007 was a transitional, roller coaster year for Arbitron and PPM, fireworks and all.

But in 2008, I think we're going to see a real adjustment in thinking about PPM, and the far-reaching ways in which it will rock our world.  Programmers have waited their entire careers for a ratings system that could measure their talents.  That time is getting close.

Thoughts on PPM: Part II

Yesterday's post covered some key factors in the new PPM world. 

So what does all this mean?  And where should it go from here?  We don't know the real ramifications of Arbitron's PPM delay.  Hopefully, they will be able to make good on their promise to improve the sample representation.  They have to.  But that will not affect why some formats look good and others look not-so-good.  And the net effect in the ad community, specifically in markets where PPM was coming, is immeasurable.  And what impact will all this "noise" about PPM’s legitimacy have on ongoing commerce in Houston and Philadelphia where PPM ratings continue to be generated?

And isn't that the bigger picture?  No one disputes the concerns that are being expressed about PPM sample and panel size.  Like any new product, there are going to be bugs, and Arbitron needs to be proactive in identifying and solving problems.

But there are mechanisms in place - specifically, the Advisory Council - where protests can best be lodged, without all the media fanfare and explosiveness we've been seeing.  Like it or not, we're all in this together - radio companies, Arbitron, advertisers, and the industry at large.  In too many situations we're working in, "great rating books" have not been translating into "great sales."  Too many Top 5 25-54 stations aren't making budget because the old rules no longer apply.  The radio business has a real problem: being perceived as a legitimate medium in the new digital millennium.  How we're regarded by the ad community is critical at this juncture, and this controversy is not working to radio's benefit. We need to fix the problem, not the blame.  It's in everyone's best interest.

So, we’ve heard the explosion.  Now let’s wait for Arbitron to make good on its promise to get this right.  And then, we can get going, figure this thing out, and start making some money on what is still a great business.

Full disclosure:  We have conducted research for Arbitron in both '06 and '07.

Thoughts on PPM: Part I

I have hesitated to write a blog entry about the PPM debate until the dust settles.  But it appears that every day, new developments continue to occur.  So, to add to Mark Ramsey's recently-posted great blog entry about PPM, here are a few thoughts...

1. PPM ratings will not  look like diary ratings.  And isn't that the point?   I don't know about you, but I am so tired of looking at monthly diary "extraps" where strongly established morning shows (that are essentially the same, day in and day out) have a 3 share in July and an 11 in August.  But there it is, again and again, and many radio execs, managers, salespeople, and advertisers continue to react to these rollercoaster, inexplicable ratings inconsistencies.  The PPM numbers that I've seen in Philly more clearly reflect reality as we know it.  Talk to PDs and GMs in Philly.  They'll tell you that, by and large, the PPM numbers they review each week/month are a much closer reflection of what they're programming, or hearing on the competition.  No excuse for low samples here, but PPM is a much closer approximation of what's coming out the speakers.

2. In PPM, there are winners and losers.  And the numbers will often be different than what we're used to seeing in the diaries.  But isn't that to be expected?  How much of the protests we're hearing about PPM are legitimate complaints about sample size and MRC accreditation, and how many are sour grapes about how certain formats just don't look as good in PPM?  When there's a rules change in any sport, teams, players, and strategies are going to be affected.  And who really thought the way formats performed in the diary were "real” anyway?  In PPM, respondents can no longer "vote" for their favorites.  Measuring real exposure/listening to radio is a whole new game, and every format will have to adjust accordingly. PPM is a game-changer, and the great players will figure out how to make it work for them.  Sometimes, reality truly bites.

3. What is the net effect on the advertising community?  I blogged about this some weeks back, and continue to ask the question about the larger issue of radio's image among advertisers and how this controversy has the potential to further destabilize radio's financial foundation.  Radio has serious perceptual problems to begin with.  This Arbitron PPM outcry creates even more doubt about whether radio truly gets it when it comes to electronic measurement.  Tom Taylor has a great piece that provides perspective from an agency point of view.  It appears that the advertising trade press and many agency types are willing to be patient and expect there to be bumps in the road with PPM.  They've been through this before with Nielsen, and don't seem surprised at all by these growing pains.  But the bottom line is that they want electronic measurement and strongly imply that it will have a positive impact on revenue.

4. Arbitron has to get it "right."  Industry leaders putting pressure on Arbitron are correct - as complicated as the PPM rollout is, they must solve these problems.  Radio execs are paying the bills, and have every right to expect this new service to be legit, from top to bottom.  And in this regard, the issues are daunting, especially when it comes to the 18-34 problem/issue.  Jacobs Media was the first to statistically identify the "cell phone only" problem a few years ago, when our first Tech Poll showed the alarming percentage of young Rockers that had dumped their landlines.  PPM methodology represents an improvement over the diary, but it's not enough.  If young formats are to be counted fairly, different methods of locating/enticing 18-34s will have to be implemented.  Our business needs youth formats to become more viable in the worst way.  They are the lifeblood of the radio industry, and yet, measuring this audience is an immense challenge.  It is very expensive to integrate "cell phone onlies" into any research format, but every attempt needs to be made to bridge this gap and provide these consumers with the chance to be in the panel.  This is the top issue for PPM.  It took some cajones for Arbitron to suck it up, shut it down, and hopefully, get PPM fixed.  Perhaps they should have seen it all coming, but the bottom line is that they’ve taken their bath, it is costing them dearly on Wall Street, and now they just have to make good on the deliverables.

5. We can’t go backwards.  It is fortuitous that Arbitron had diaries running in NYC, but if anyone thinks that there’s any sense in running parallel ratings – diaries and PPMs – think again.  The diary as a ratings-gathering tool is hopelessly flawed, primitive, and out-of-step with the digital world.  The diary needs to be replaced by electronic measurement, pure and simple.  This is about making PPM work – and doing whatever it takes to make that system viable and reliable.

6. Broadcasters are pissed.  It's been a tough year, and '08 isn't projected to be any better.  All of us have seen the results of the anger, at times splattered in many different directions.  These are the times that truly try souls, to poorly paraphrase Thomas Paine.  How radio reacts under times of duress will say a lot about our ability to redefine and re-energize our business.  Will we panic or will we hunker down and figure out strategies that can transcend the new digital realities?  In this confusing and depressing environment, Arbitron is an easy target.  PPM is more expensive at a time when many stations are throwing employees out the door.  And when Arbitron's numbers aren't on the money or broadcasters perceive arrogance, it's easy to pile on.

So what does all this mean?  And where should it go from here?  Check back tomorrow for those thoughts.

Full disclosure:  We have conducted research for Arbitron in both '06 and '07.