For this week’s Programming To Win column, Richard Harker delves into one of the “urban legends” created by the PPM. How important is external marketing in a PPM world? Can stations rely totally on contesting and on-air promotions to grab ratings? Harker debunks this myth and shows why the issue is far more complex.
Richard Harker
By Richard Harker
Urban legends regarding PPM are growing as the roll-out reaches more markets. If history is any indicator, most will turn out to be radio’s version of the scuba diver in the tree.
One example is the growing belief that outside marketing and positioning are unnecessary in a PPM market.
The only thing that matters is on-air contests and promotions.
The notion that marketing no longer matters is based on the belief that PPM is “passive.” Unlike the diary where participants have to write down what stations they listen to, panelists need only passively carry their meters with them.
(The fact that panelists have to remember to carry their meters makes PPM far from passive, but that’s a subject for another day.)
The argument goes like this: Listening is an active act done by choice. Because the meter records encoded radio without the knowledge of the person carrying the meter, it doesn’t really measure listenership.
The meter doesn’t know if the panelist is listening. It only knows that the panelist is close enough to a radio for the meter to detect it. That’s why Arbitron doesn’t talk about listening any more. They talk about exposure.
If the meter is only recording exposure, what’s the point of marketing or making an effort to position the station? What good does it serve if some (most?) people aren’t actually listening to what the meter detects?
This line of reasoning is one reason stations have diverted their external marketing expenses to contests and on-air promotions.
And it seems to work. PPM ratings seem to pick up major on-air promotions and create rating bumps.
Unfortunately, it’s a trap.
Yes, on-air promotions can produce bumps, but those bumps are transitory. Giving stuff away can increase exposure for short bursts, but the numbers invariably drop after the promotion ends.
Nothing new about that.
We’ve always known that major promotions can impact ratings. Consider the Birthday game, and the success that stations found with it even in the diaries.
Before that it was the Dollar Bill game. That too could spike the numbers.
The only difference with PPM is that we see the bump more quickly, and the bump dissipates more quickly.
That’s the trap of contesting. It has no lasting impact. If anything, the impact of repeated promotions declines over time.
Contesting for radio is what a coupon is for products. A coupon is a way to get a quick spike of sales.
And what the product people have found is that coupons work only as long as you keep couponing. As soon as the coupons stop, people go back to buying what they were buying before.
Same with contests. You can bribe a person to listen to the station for a while, but as soon as the contest ends, people go right back to listening to what they were listening to before.
If the goal is to grow audience for the long haul, contests are just a sugar high. You give away stuff, get a spike, and watch the audience drop. So you do it all over again, see another spike, then again watch it drop.
Despite the belief (perhaps really a hope in this era of tight budgets) that on-air contests are effective in growing audience, the only way to really grow and keep an audience is through sustained external marketing.
Marketing accomplishes two critically important goals. First it raises awareness of the station. Top-of-mind awareness is the single most critical need for a station to grow regardless of whether the market is diary or PPM.
In a diary market the impact of higher awareness is direct. People do not write down all the radio stations they listen to. They write down the two or three stations that are most top-of-mind.
In a PPM market, the impact of higher awareness is just as critical, but its impact more indirect.
Radio listening is done primarily while also doing something else. Little thought goes into choosing which station to tune to. The decision is a semiconscious or even unconscious decision.
Because a listener doesn’t really think about it, the first station that gets turned on is the one that has the highest top-of-mind status.
But the goal of marketing goes beyond just generating top-of-mind status. People are programmed to find reasons behind the things they do, even when those reason are pure fantasy.
People need a reason to buy a Cartier watch or Jimmy Choo shoes. They need a reason to use an iPhone instead of a Blackberry. They need a reason to hate broccoli or love an expensive bottle of wine.
And people need a reason to listen to one radio station over another.
We would like to believe that people choose a radio station based on a fact-based rational decision.
Forget about it.
People choose a radio station based on whim, chance, and occasionally a little twisted thinking. There’s little rationality involved.
With whim and chance so important, a radio station needs to take charge of the decision through marketing. Marketing molds, manages, and manipulates perceptions of the radio station.
Look at auto advertising. Cars are advertised as a reflection of a driver’s personality. The ads convey the message that the buyer is intelligent, perhaps virile, perhaps successful.
And it works.
Do you drive a Prius? A BMW? A Volkswagen or Cadillac? Regardless of which car you drive, your choice was determined by your perceptions of the car, and in turn what statement the car makes about you. All that was created by marketing.
Radio stations also need to mold and manage perceptions. In a way it is even more important for radio to manage perceptions because radio is free and casually consumed. There’s little investment in choosing one radio station over the others.
Consequently, it is critical that we market to make a persuasive case why listeners should choose our radio station over the alternatives.
Pandora is a prime example of the effectiveness of persuasive marketing. Pandora is a good pure-play streaming service. So is Slacker.
Last month Pandora had 372 million session starts compared to Slacker’s 16 million. Is Pandora really twenty-three times better than Slacker?
(In radio that would be like the market leader having a ten share and its nearest competitor having a 0.4 share!)
What accounts for this tremendous difference? Marketing. Pandora has been able to position itself as the premium brand in streaming. It’s Lexus versus Kia.
But if PPM just measures exposure, does any of this really matter? Yes.
In a PPM market, we’re not just trying to impact the listening patterns of a panelist. Now we have to impact the listening patterns of everyone with whom the panelist comes in contact.
That means that while we worry just about what diary keepers think about the station, with PPM we have to worry about everyone in the market.
We can’t do that with just contests.
Broadcast radio stations who fail to market and instead run contest after contest initially see rating spikes which is why the urban legend is growing.
The problem with this approach won’t be apparent for a year or two later, but it’s real. The short term benefit can conceal the impact of a deteriorating brand losing top-of-mind status for only so long.
Ultimately contests lose their power to generate spikes. Once hooked on contests, the only choice is to create bigger contests with more expensive prizes.
But the spikes will still be transitory, the listeners will still fade away, and the process will have to be repeated endlessly.
At the end of the day, stations that rely on this short term strategy will be overtaken by stations that invest in creating higher top-of-mind awareness and a well-defined position in the market.
Richard Harker is President of Harker Research, a company providing a wide range of research services to radio stations in North America and Europe. Twenty-years of research experience combined with Richard’s 15 years as a programmer and general manager helps Harker Research provide practical actionable solutions to ratings problems. Visit www.harkerresearch or contact Richard at (919) 954-8300.
