An in-depth study by a New York University professor portraying a grim outlook for the terrestrial radio industry generated a not-so-surprising backlash from key players in the traditional radio industry, especially big radio broadcasters and radio audience measurement firm Nielsen.
The 30-page report by NYU Steinhardt Music Business Program Director Larry Miller, which was first reported Thursday by Variety, can be accessed here.
The report centers on radio's inability to connect with younger listeners -- especially millennials and so-called “Generation Z” cohorts who grew up in an era of abundant digital audio alternatives to terrestrial radio broadcasting, as well as the failure of the radio industry to respond quickly enough to the newfound competition.
Among other things, the report notes that one of radio’s strongest technological bases -- the automobile -- has begun to erode thanks to the introduction of digital audio receivers competing with or supplanting conventional terrestrial radio devices in many new car models.
Citing the radio industry’s gold standard for radio audience measurement -- Nielsen’s portable people meter sample -- Pierre Bouvard, chief insights officer of Westwood One, takes the report to task, analyzing six years worth of listening data indicating that radio’s audience levels among three key younger demos -- children 6-11, teens 12-17, and adults 18-24 -- has been "virtually unchanged since May 2011."
While Miller’s report also makes an explicit attack on the validity of Nielsen’s radio audience measurement, noting that “radio’s ratings system can be gamed and fails to deliver on the specifics that advertisers demand,” Nielsen issued a statement refuting those observations.
The Nielsen statement points out that its radio measurement methodology continues to be “the industry accepted currency for the buying and selling of radio advertising,” and links to the recent findings of its Total Audience Report showing that younger radio audiences have been stable:
“In Nielsen's latest Total Audience Report 2017, Q1 data shows that Generation Z spent over 35 hours per month listening to AM/FM radio and 88% of Generation Z use radio each week. Meanwhile, Nielsen’s Ethnic Audio Today report cites that nearly 75 million weekly radio consumers are Black and Hispanic - up from 73 million a year prior.”
It would be interesting to hear exactly what Miller means by the PPMs could be "gamed" and whether he has any evidence that they are being "gamed". Also, aside from measuring whether the person wearing or carrying the PPM could have heard a particular radio outlet, what else are advertisers demanding information-wise? Do advertisers think that Nielsen can provide them with actual listenership figures per commercial or that every single radio listener can be identified individually and tracked as to shopping behavior after "exposure" to each ad? With the vast majority of listening done in the usual fashion---not digitally---how could this be done? And even if it were possible, how would advertisers respond---by monitoring the sales impact of each commercial presentation on a daily basis and tinkering with their media buys on a continuouis basis? Is that a realistic possibility?Just curious.