Coaches Corner
Younger Formats In A PPM World ..Switch Format? …
I love to talk radio and recently I had a conversation with an Operations Manager in a PPM market with a Hip-Hop station in a small cluster. His ratings have been plummeting for some time now. He’s had an occasional glimmer of hope over the last several years, but nothing like the old days before PPM.
He wanted to know my opinion. Rather than go through a back and forth with him, I promised that I would write a column and add my two cents to what’s going on with Nielsen in PPM markets with younger learning formats.
Things Have Changed …
Listening by younger people has changed because of what they’re using to listen. They’ve included other audio sources for their listening pleasure. However, this exposure isn’t being captured in real-time by Nielsen.
Not Good …
Nielsen Audio Measurement technology isn’t compatible with AirPods, earbuds, and headphones. Yes, there’s a mathematical calculation based on recall applied from the previous year’s PPM panelists to the upcoming year for measurement. This fix is like when teachers decide to weigh things on a curve and have mercy on students, so the majority don’t get low grades on a difficult exam.
Generational …
Nielsen’s Band-Aid approach to this issue hasn’t consistently worked. This is a generational problem. Older demographics are exposed to terrestrial stations and the majority aren’t exposed to music in any other way. This is why older formats excel in PPM ratings and younger formats don’t do as well.
What To Do …
Fixing this would require Nielsen to spend a lot of money. The group of private-equity investors led by Elliott Investment Management and Brookfield Business Partners that own Nielsen, don’t typically do things like that to meet the goal of profitability. Nielsen could pass the cost onto radio companies but that’s not going to work since stations are already paying huge fees for the privilege of using Nielsen’s rating results to sell advertising.
No Way …
I recently read that the younger generation has stopped listening to as much Hip Hop and Top 40 music. That’s easy to disprove. Just look at streaming and download numbers, which totally contradict that. It’s a generational thing with Nielsen Audio Measurement technology benefiting older formats in PPM markets. Ironically, what I read was probably based on statistics provided by Nielsen. Unfortunately, they are the recognized authority in this area.
Switch …
The smart thing to do with younger-leaning formats would be to adjust to an older format that benefits from the technology used by Nielsen in PPM markets. The real losers are smaller clusters and independent owners.
The Small Guys Lose Out …
Large corporations with huge clusters will only complain about the method used to measure to a point. Although their younger-ended formats aren’t performing like they used to, these companies have older formats within their clusters. So, when they go to agencies to sell, the lower ratings for the younger formatted stations become qualitative data.
The clusters can show the sizable shares of their older formats and add in the shares of the younger-targeted stations. The actual size of the ratings for these stations becomes added value for the overall picture of market share.
No Longer …
Individual station dominance stopped being important for radio years ago. It’s all about the clusters of stations. If you’re a small, non-diversified cluster of formats or a single independent owner, the odds are that things are not nearly as profitable as they once were.
I Repeat …
I’ll say it again, that’s why I suggest considering a format change to an older format. Nielsen’s technology in PPM markets works best with the generation still exposed to transmitter-delivered radio signals. This is what the Nielsen wearable units for measurement work with best.
Sorry …
I know my suggestion sucks, but sometimes you must face reality until things change to a more up-to-date measurement system in PPM markets. In a few years, these younger listeners who aren’t exposed to music via transmitters will become part of the older demographics. When this happens, things might get crazy.
The Best Way To Explain …
This whole thing reminds me of the movie Wall Street starring Michael Douglas, Charlie Sheen, and Martin Sheen. My favorite part was when Charlie’s character (Bud Fox) was President of his father’s (Martin Sheen) Bluestar Airlines for a few hours before the new owner, a private equity company owned by Michael Douglas’s character (Gordon Gekko), sold off as much of the airline’s assets that they could and then sold the remainder to another company. That’s probably what’s going to happen with Nielsen in a few years. Maybe the next owner will spend the money to improve PPMs issues. Either that or come up with a new system that works better.
And if you need some friendly advice, drop me an email; samweaver@samweavermedia.com or text me, (972) 672-4812.