PPM may mean deeper buys at radio.

One of the more interesting reports out of the RAB’s opening day in Atlanta came from Arbitron’s session on the PPM.    Janice Finkel-Greene, Executive VP of Futures & Technology (love that title) at the Initiative ad agency says, “Deeper buys are the difference.”  This could be good news for lower-tier stations who have been passed over for buys; but, it could also mean bad news for stations who traditionally get a bulk of dollars from major advertisers. R&R quotes WBEB/Philadelphia GM Blaise Howard, whose market was the first to adopt PPM, as saying “Macy’s did spend less on certain stations, but they’re buying more stations.”  He claims advertisers may now buy 18-deep in the market!

Arbitron has delayed PPM in New York City and other markets by nine months following loud complaints from radio.  Let me go on record to agree that PPM is critical to radio’s future relevance with advertisers.  But, as an industry, we MUST have a coherent strategy to sell these new ratings to media buyers.  Philadelphia saw a 24% drop in cost-per-point with PPM currency because radio lacked a sales plan.  These losses are potentially devastating to stations joining the PPM frontier this year when added to already declining revenue.

In some markets, key stations are separated by tenths of a share point in the most attractive demographics.  PPM will finally give buyers (and sellers) a resource to more carefully examine the differences between stations and make better decisions than ones based solely on ratings efficiency and “earned value” promotions.  PPM brings radio on par with TV as a reach medium.  PPM gives radio more credibility.  PPM lets sellers develop pitches unique to advertiser needs:

  • National buyers with established brands will benefit from shorter commercial flights that maintain awareness rather than establish a new product;
  • Local buyers will benefit from TS, establishing their brand through longer commercials and higher frequency.

But, at some point, radio needs to sit down together in a dark smoke-filled room and figure out the plan.  Radio  stations need to be telling the same story.  Otherwise, if we’re not setting the standards, the agencies will dictate buying … and, that’s not good for anybody.

Agencies will always try buying media based on the lowest numbers available, which are AQH Rating.  Radio needs to change the paradigm towards Cume/Reach, emphasizing a move away from AQH.  Newspapers sell based on circulation (which is always an inflated number).  TV sells based on the number of viewers.  Radio needs to sell the same way — based on the number of listeners.

Radio can also benefit from selling destination programming … capitalize on the best talent, the best features, the best programs, contesting periods, etc.

What’s the downside of PPM?  Posting!  I’ll address this in a future blog.

One Response to “PPM may mean deeper buys at radio.”

  1. Can you tell me what the “TS” refers to in the quote, “Local buyers will benefit from TS, establishing their brand through longer commercials and higher frequency. “

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