May 22, 2012
Capturing Cume With Car Tunes
Long ago in a galaxy not so far away, in the land of short songs, long contracts, shotgun jingles, CDs, live copy, local morning shows and one programmer to a station, life was simpler. But as you know, that has all changed.
There's a reason for the change. High-financial expectations have been placed on major corporations. This was prompted by Wall Street's need for sustained revenues and genuine success from its radio divisions. In a broadcast world of growing complexity, the traditional approach to management that once shaped executive leadership is no longer sufficient to run the modern organization.
Unfortunately, the same focus and commitment that promise the highest returns necessarily imply the greatest probability of failure. In keeping with that thought, recent studies have shown that the one place where we may still have a chance to capture and hold listeners' attention may be in their cars. So what's really driving the "dashboard dilemma?"
As the audience for AM and FM radio continues to decline, other forces are busy at work searching for the "next radio." Among other things, they're searching for a way to make money by helping listeners discover new music. Online music providers and services such as Pandora, iHeart, Imeem and Spotify are giving us an early glance at that next chapter in radio history. They're all trying to figure out what blend of user-generated content and expert guidance will attract and hold an audience.
As in other areas of media, the music industry is finally beginning to come around to the difficult truth that we now live a world in which consumers (especially younger consumers) expect information and entertainment to be free. Efforts to sell music by subscription have mainly failed. But now, traditional radio's offer of free music surrounded by advertising is also being rejected by a generation that resents undesirable interruptions.
That has caused several new new types of research to surface. One of them, Listener Driven Radio or LDR, developed by Daniel Anstandig, is a system in which the collective listening habits of a station's users are probed. When you choose a song on the station's site, you see a list of artists who are "similar." Based on a custom database that catalogues thousands of songs, according to the rhythm, harmony, mood, style and lyrics it allows listeners to then fine-tune by rejecting those songs they dislike and embracing those they adore. And then the software points you in that direction.
Surviving and succeeding in today's turbulent and challenging times is an ongoing exercise. Programming strategists have long argued for strategic purity and commitment, citing research and examples showing that the highest ratings are correlated with focus and commitment. Aggressive interactive departments provide stations with opportunities outside of their terrestrial signals. This includes listener clubs, phone apps, texting and social networking sites. They're all important in promoting listener engagement in their brands. If radio wants to survive in the new age of media consumption, it has to be aware of just how its listeners are changing, when and where they listen.
Many of our potential listeners are spending much more time in their cars. Would you say they're encountering more traffic than they were a year ago? Absolutely. We'll all agree that time spent in cars (as driver or passenger per weekday or weekend day) has increased. Not only that, but people also want the latest technological advances in their cars. They like the idea of choice, but they often overestimate their own capacity for managing those choices.
And what about daily commute patterns? That number is nearly equal to the time spent in car. For instance, on a national average, 14% of our waking life is being spent in cars. In higher traffic areas such as southern California and Washington, D.C., we know that number is going to be even higher.
Generally speaking, men spend more time in cars than women, with longer commutes than women have. The average Time Spent Listening is just over two hours for both women and men on weekends. Almost 56% of the time they're the driver and alone. In-car listening is up while home and at-work listening has decreased.
The latest year-to-date statistics from Mon-Sun 6a-midnight indicate in-car listening is gaining as a percent of total listening. Men are heavier in-car radio users than women. In-car listening peaks at 35-44 (male). In-car listening is not only a major-market concern; there is a concern about the percent of total radio listening done in car.
For the most part, whites spend more time listening in-car than African-Americans and Hispanics. Why? Because they tend to live further away from their work. In-car listening is crucial to all formats. For Urban/Urban AC stations, 30% of total listening is done in a car (often to a signal that is less than ideal).
When is the new drive time? As audiences move through the course of a day, we find that listening still peaks in the 7-8a hour. This is nearly as high in the 4-5p hour. In-car is more than half of all listening from 5-6p. More than half of workers' drive time is over before 8a. The 9-5 concept is actually used by very few people. People who work outside the home have gotten to their workplace by 8a, and nearly half of the workers leave work before 5p.
Radio is overwhelmingly the device most used in the car, but that is changing -- and not to terrestrial radio's advantage. All is not well. Radio is less dominant in-car among 12-24 year-olds. Here's a quick look at the percentages of those spending the most time with radio in car.
- 12-17 year-olds - 67%
- 18-24 year-olds - 55%
Radio is the most essential in-car device for a large majority (AM/FM 69%). Radio is much less essential in-car among 6-12 year-olds (which Arbitron now measures in PPM markets) and 12-24 year-olds. Led by Ford, there is a high interest in current and future radio display technologies. To be able to search for radio by format, you must search for stations offering weather information on demand. That often means searching for the strongest signal. While satellite radio familiarity has still not yet translated into mass subscriptions, nearly one-third of the sample was not that interested in satellite radio.
Interest in satellite radio increases with pre-install options. Interest in satellite radio is highest among men and 12-24 year-olds. They are the listeners who care the most about music. There is a widely varying interest in satellite radio by format preference. Very few say they are likely to subscribe to satellite radio in the next six months.
Almost all in-car listening goes to pre-set radio stations (69%). P1 stations are overwhelmingly programmed on pre-set buttons. Pre-set buttons are programmed to far more FM stations than AM. Many don't have a single AM station pre-programmed. Most have five pre-sets. Most presets stay set.
Those in-a-car change stations most often. People are much more likely to change in-a-car than at home or at work. Short bursts of content are usually followed by short bursts of commercial stopsets. What we recommend going forward are longer bursts of content followed by longer bursts of commercials.
Can Traffic Reports Help Build Cume?
For anyone who is commuting in their car, the answer is: "Yes, traffic reports can help to build cume." So then the follow-up question is when you want the latest traffic information, where do you go first? Radio. Two-thirds of the adult audience is at least somewhat interested in rush hour traffic reports. Naturally heavy commuters are more likely to be interested in traffic reports than those with a lighter commute. And what's interesting is that recent studies show it doesn't matter whether their favorite traffic station is AM or FM, as long as the information is current and accurate and the signal can be heard.
Which format's listeners care most about traffic reports? News/Talk followed by AC. Rock is fifth. Urban/Urban AC are eighth. Listeners in all formats want to know the best ways to avoid traffic problems. You might want to consider long sweeps as a high in-car listening strategy. What else can we do to get listeners to give us a pre-set? Consider creative pre-set strategies such as potential partnerships with new and used cars. People still really want to know the title and artist of a song and be able to search for a station by format. One future strategy might be to expand your appeal among 18-24 year-old males, and aggressively target this vital segment. There are some composite-hour theories and concepts that can help you there.
Now let's briefly look at in-car buying decisions that can result in sales. Recent planning starts with the idea that "when" is the critical variable rather than "how many?" In other words, advertising effects can also be affected.
For those targeting consumers close to purchase, PM drive is the most logical time. Workers make many stops on the commute home. Two out of five consumers don't make the decision to shop until the last minute. An in-car commercial can deliver immediate results for an advertiser. Who are the heavy in-car consumers? In most markets, they are in households with $100K annual income, which include males 35-54. Contrary to what some believe, the older audience is not gone. They are just less satisfied.
Before we delve into some of the changes triggered by PPM, we want to acknowledge the fact that there have been some re-occurring complaints which involve the issues of bounce, weighting and panel fatigue. Weighting can have an exacerbating effect. The key for the diary-keepers was what respondents wrote down. Arbitron does not control what respondents write in the diary. There are edit rules when things are not clear.
So now the question becomes is there going to be more bounce with PPM? Probably not. The issue of PPM panel failure is based on the fact that PPM panel participants are asked to continue for up to two years, instead of just a week with the diary methodology. During this period they have to remember to take the meter with them each morning wear it for at least eight hours a day and then dock it each night. Recent studies have shown that in some markets, over time, listening declines. This is something to keep in mind if yours is a PPM market.
With PPM there are going to be more competitive stations in every market. So initially there may be more stations, but smaller estimates. Smaller estimates mean that smaller changes that can cause bigger rank shifts. That could result in greater dependence on shares instead of AQH persons or ratings. The result will be the use of extrapolations and expectations of consistency across individual months.
There are differential premiums for African-Americans and Hispanics everywhere. And there have also been male 25-34 treatment changes. They now involve a second phone center and E-Consent (use of the Internet). Respondents may be asked to go online to respond electronically. There is also a new Caller ID (a message has been added to the call so you know it's Arbitron) along with an increase in household follow-up premiums.
Genesis ID Plus was first implemented eight years ago along with a sample cleaning service that cleans the numbers up in advance so that the callers won't waste so much time. The best predictive dialer will not pick them up. There are some business numbers.
Arbitron has instituted new consent promised incentives. As a result, they have seen a gain in response rates. Sometimes when the response rate is up, demo proportionality is negatively affected. Looking ahead, new steps involve refining designs and more qualitative testing. Issues will center on audience estimates along with comparisons between the paper diary and the PPM.
A quick look at the address-based sample shows the phone frame deteriorating. Cell phone number portability and Do Not Call (DNC) have experienced changes as well. Arbitron must look at alternatives to the telephone frame. They have tested an address-based sample frame that they will mail to all households and call those that Arbitron can call. There are numerous issues with using addresses instead of phone numbers. Plus there are telephone/telecom issues.
Currently, there are nearly 60 million phone numbers registered with the FTC. Arbitron is exempt from the Do Not Call (DNC) rules since the company is not a telemarketer. The prediction is that this may be a good thing for telephone survey research because fewer calls over time mean more participation. At this time, Arbitron is including cell phones in its sample frame.
Here are a couple of key issues that affect ratings. Cell phones belong to individuals while landlines are usually associated with households and businesses. There are provisions of the Telephone Consumer Protection Act that are affected. Response rates were not that high, but the refusal rates were very low and there were lots of voicemail and disconnected numbers. Ten percent of the respondents did not live in the three states that Arbitron called.
When we look at number portability, we find that wireless-to-wireless is not much of a ratings issue. Here are some of the questions being raised:
- How important is in-car listening to overall radio listening? (Very.)
- Is radio losing ground with cars? (Yes.)
- Are satellite radio and other new devices impacting AM/FM radio? (Of course.)
- Is in-car listening only a major market concern? (No.)
- How important are pre-sets? (Very.)
How valuable is the in-car listener to advertisers and how large an impact is cell phone use having on in-car listening? The answer is it's already huge and growing. And it's getting younger - meaning that more and more young listeners are becoming cell phone-only users. Are they going to be willing to carry an extra device (a PPM) just in order to be a paid participant in the PPM world? Maybe.
It's still a numbers game and the choices underlying a focused, committed strategy must often address a future that involves unpredictable changes. Those realities are part of the "dashboard dilemma." Even as they struggle in the current economic meltdown, vehicle manufacturers must pay close attention to product vitality. They're going to have to provide what their buyers want -- more audio choices in their cars. By providing these features they may be able to look ahead to a high-growth, flexible global future. Both the vehicles and their audio delivery systems will continue to evolve. In the future, auto manufacturers will have to design and market vehicles to wider range of consumers than ever before. And while even the best planning strategies won't guarantee a successful future, they may help us create one.