• by July 23, 2004

IS RADIO USING ITS LISTENING SKILLS? -- Listening to Arbitron chief Steve Morris speak to the Wall Street crowd on Thursday reminded us of something really important to the Madison Avenue crowd. "When radio is added to TV in a media plan, it brings in a significant number of unique consumers not reached by television alone," Morris said during a second quarter earnings briefing with financial analysts. And while that might seem obvious to anyone who understands the fundamentals of media dispersion, it was what Morris said next, that seemed to frame the whole issue for the megahertz crowd. "These findings make a strong case for giving radio a more significant piece of a media plan."

Those "findings," of course, come from Arbitron's portable people meter system. Specifically, they come from an analysis Arbitron teamed up with OMD on, which was based on data from Arbitron's PPM test in Philadelphia. What's most surprising about the insight is how deafly it appears to have fallen on some key members of the radio industry, who for reasons of either short-term fiscal self-interest, or a simple fear of change, are threatening to sabotage an effort that would provide greater insights into radio's contribution to unique reach. All we can figure is that those radio honchos don't really understand the implications of this research, and what it means for changing the way advertisers and agencies look at the role of radio in their mix. Either that, or they are content with what now amounts to a 7.8 percent share of U.S. ad spending, at a time when other media have designs on boosting their share, and are investing in new measures of accountability to justify that.

To be sure, the PPM isn't necessarily all upside for radio. And it doesn't come without its risk. But we've got to believe that the risk is worth the potential reward when it puts on an equal planning footing with TV, which now commands 23.7 percent of U.S. ad budgets. But if OMD's and Arbitron's findings hold up, radio appears to have a lot more to gain than to lose. It's not just the unique reach that it delivers, but among the types of consumers that it delivers it. If you want to understand that, just breeze through the table below, which shows the unique reach that radio contributed to a wide variety of TV and radio media plans analyzed by OMD and Arbitron. What it shows, is radio's unique contribution to audience reach among a range of both condensed and dispersed media plans. The significant finding is that radio tends to do an especially good job of contributing reach among the youngest media consumers, which also just so happen to be the ones that are hardest to reach in other media, and are the ones most sought after by advertisers. It's also the audience they tend to pay the highest ad premiums to reach.

Radio's Contribution to Unique Reach in TV/Radio Media Plans

	---------Condensed Plan---------			---------Dispersed Plan---------
	High	Medium	Low	High	Medium	Low
Teens	4%	21%	19%	13%	21%	22%
M 18-34	8%	19%	28%	8%	20%	22%
W 25-54	4%	7%	10%	3%	9%	13%
A 55+	1%	5%	7%	2%	5%	7%

Source: Joint ESOMAR paper presented by Arbitron's Roberta McConochie, OMD's Beth Uyenco, and Stone House Systems' Kevin Killion. Derived from Arbitron's portable people meter test in Philadelphia.

FIRE SALE, OR JUST ON FIRE - This just in. The Riff has heard that a fire broke out today at Grey Worldwide's offices on the 26th floor of 777 Third Ave. Word is everyone is okay.