A HANDICAPPER’S DREAM

Using PPM Patterns to help buy Radio Diary Markets is a License to Steal

By Erwin Ephron

Overwhelming agency and advertiser support of the Arbitron PPM as a better way to measure radio is encouraging, but also in a way disappointing.

It’s like one of those familiar UN resolutions giving a sense of the members with no call to action. I hope that impression is wrong.

PPM gives radio buyers an opportunity to beat the market right now. And that is what good buying is about. It also promises more money for radio.

Data from Philadelphia, Houston (and Quebec, if you’re global) show consistent, important and common-sense differences in patterns of radio listening, PPM compared to the diary.

Since there is agreement that PPM is closer to the truth, I wonder if a few smart agencies aren’t already using PPM to adjust diary data when they plan radio for clients. And doing it sooner rather than later because when a market goes PPM, sellers also adjust and the competitive advantage is gone.

Let me share with you how easy it is to apply PPM learning to diary markets. It starts with understanding the different patterns in listening reported by the two techniques and why they happen. Then, where we are persuaded that the PPM is right, using that model to shape and execute the buys.

Ratings and costs-per-point are still from the diary. PPM patterns are applied to the number of stations, spots and dayparts selected.

REACH IS HIGHER

PPM finds reach where the diary finds frequency. Not a bad trade-off for both buyer and seller. Reach increases because PPM shows people listen to more stations.

This higher reach is not limited to a few day parts. The PPM weekly cume equals or exceeds diary-reported levels throughout the day. A recent Philadelphia market analysis done by Harmelin Media using PPM to re-calculate diary-based radio buys shows the increase in station reach translates into greater reach for a wide range of schedules.

But unlike TV where expanding reach tends to mess-up targeting, PPM shows radio maintains the same high demo concentration by format as shown by the diary.

The PPM tip sheet says buying fewer announcements on more stations and using more day parts should produce reach levels in radio very close to those delivered by Television. At a fraction of the TV cost. All of this with no sacrifice in targeting.

RATINGS ARE LOWER

Next, PPM shows more frequent but shorter listening occasions with listening spread more evenly across the day. This produces lower average quarter-hour ratings for all day parts with morning drive taking the biggest hit.

But let’s not cry for radio. The overall loss traces to the small group of diary keepers who report continuous listening (25-plus hours a week) to a single station.

Inspection of these diaries shows single-station listening is most often a time-saving straight line drawn down the page. That pattern all but disappears in PPM where there is no incentive to short-cut the job of diary-keeping.

MORE STATIONS, LESS TIME

Balancing the loss in continuous listening, PPM reports more listening for shorter periods. This corrects another familiar diary bias. The qualifier for radio’s average-quarter-hour rating is listening for at least five of the 15 minutes. Diary-keepers are instructed not to record listening of less than five minutes, but they don’t time it. They just don’t record brief episodes, even those exceeding five minutes. It makes keeping a diary easier.

PPM collects all listening and edits out only the less than five-minute segments. That’s why PPM finds more short duration listening.

DAY PART VALUES CHANGE

The PPM’s revaluing (and potential re-pricing) of station inventory is the real license for buyers to steal.

The PPM reports all day part ratings lower, ranging from -12% for afternoon drive and evening, to -35% for AM drive.

The relative value of evening, late-night and week-end compared to morning drive increases by 35%. This recommends shifting some drive-time dollars to other dayparts to produce more exposures-per-dollar and a higher reach to the bargain.

GIFTS FOR SELLERS

On the other side, PPM promises some nice gifts for sellers if they unwrap them. More total dollars to begin with. PPM re-positions radio as a targeted, lower cost reach substitute for newspapers and television. It makes undersold inventory more valuable. And there’s no better way to get the business than letting buyers think they know something you don’t.

After looking through the PPM data for Houston and Philadelphia, my advice is don’t wait for the roll-out. Start using the PPM patterns now. Remember the confused TV weatherman who kept saying: “Everyone complains about the ratings, but no one does anything about them.“

This may be our chance.

- February 1, 2006 -

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