Pat Welsh
by Pat Welsh
Now that most of the holdouts have come on board with the PPM, broadcasters in Philadelphia are awaiting the first official electronically measured ratings. Next in the queue are Houston and New York. It will take years before the Top 20 (let alone Top 50 or Top 100) markets will all get the PPM, but the change is inevitable.
Meanwhile, as radio holds its breath over the debut of electronic measurement, other media have jumped into even more sophisticated forms of measurement with both feet. TV is going through some big changes with its ratings and, looking ahead, there’s even more on the horizon for radio.
The Apollo Project
Arbitron’s PPM is just the first step in a revolution in radio ratings and advertising. The next step is likely to be the child of Project Apollo. This is a collaborative effort between Arbitron, Nielsen and a number of major advertisers to gauge the effectiveness of media advertising. Think of it as overlaying PPM data about listening and viewing patterns with actual purchasing data from those same PPM respondents.
The pilot program started a year ago. In addition to the PPM device, selected households also receive a scanner device, called the Homescan, so that they can swipe and record all of their purchases. Nationally, the initial study includes 5,000 households with over 11,000 people ages 6+.
The idea is to compare media exposure with purchasing habits. So while programmers in the near future are comparing PPM data on listener behavior with their music logs, advertisers will be doing the same with the respondents’ purchasing habits. Initial results have been encouraging, so advertisers are anxious to move forward with this initiative. Get more information on this initiative from the Arbitron and Nielsen web sites.
Commercial ratings for TV
Late last year one of the most significant events in media history happened with little fanfare outside of the TV industry. The big change was that TV networks agreed to start selling commercial ratings, not program ratings. The networks are leading the way, but this will also impact cable in the future.
It’s not an exact, commercial-by-commercial rating. The numbers will be based on the average of commercial pods throughout a show. That means that what we’ll actually be looking at will be a retention number for the show, not a rating of specific commercials.
Starting on May 31st, Nielsen will be offering six different ratings streams:
* Live viewing.
* Live viewing + DVR viewing, same day.
* Live viewing + DVR viewing within one day.
* Live viewing + DVR viewing within two days.
* Live viewing + DVR viewing within three days.
* Live viewing + DVR viewing within seven days.
Much to the irritation of advertisers, this change will take place too late to affect this year’s “up front,” the period in May when the TV networks put on their dog and pony shows for advertisers about next fall’s programming. The networks are asking advertisers to commit upfront to buying advertising.
According to Ad Age, the upfront sales have been down three straight years as advertisers have balked at paying premium prices up front when they don’t know how many people see the commercials. The big unknown is commercial skipping with DVRs (estimated to be in about 10% of all households now). The second big issue is the timeliness of the advertising. What if a user is time shifting (by three or four days) a TV program that has time-sensitive advertising (a one-day sale going on “tomorrow”)?
There are two reasons for this important change. The most obvious is commercial skipping thanks to the use of DVRs (Digital Video Recorders). The other reason is the ability to do more precise measurement of user response to online advertising. The implication for radio in the long term will likely be the implementation of initiatives like the Apollo Project.
Total Audience Measurement
Total Audience Measurement, or TAM, is an attempt to tie together TV viewing and online viewing. NBC, in particular, is focusing on research that shows that most people who watch a show online do so within the first 24 hours of the original broadcast.
Networks hope to sell over-the-air and online numbers as a package, reasoning that with the overwhelming amount of viewing occurring in the first 24 hours, advertisers can still be effective with a time-sensitive campaign. For example, if an advertising campaign is built around a 30-day sale, according to NBC’s research, adding online viewing will still be relevant to this advertiser.
What the nets are trying to avoid in the cannibalization of their advertising revenue since CPM rates for online are not nearly what they are for broadcast. This may work fine for national sales on the network level, but what does it mean for local affiliates? Their audience will be cannibalized by online viewing.
…and then?
Radio is the last medium to go digital in terms of both its content and measurement of its audience. We have to get used to the idea that measurement will be moving towards a more real-time, real-world environment. The hope is that these metrics don’t show lower overall listening to radio, which would seriously undermine our revenue model. However, the precision of measurement of other media, and the demands of advertisers, will force radio to move in this direction.
But this is much bigger than new ratings technologies. What we need to be thinking about as an industry is how to orient our programming towards the way that people really use the radio. Here are some key questions that we need to be asking ourselves:
- Have we built an entertainment brand, or are we just programming a format by rote?
- What assumptions have we made over the years about how to program that are counter to what our listeners really want and respond to?
- Are we cluttering our airwaves with details and useless information that can be pushed onto our web sites for those that really want to know?
- Are we looking at other technologies as being other platforms for delivering our content, or do we view new media as the enemy?
How we answer these questions will determine how well we maintain our position in the media pecking order.
Pat Welsh, VP Music & New Media at Pollack Media Group, can be reached at 310 459-8556, fax: 310-459-8556, or at Hq@pollackmedia.com.
