TRIPs Take False Credit for Holiday Sales Bumps

They're desperately grasping at any straw they can find to maintain relevance, and it's costing the clients who don't know any better.

by Josh Colletta
The Radio Advertising Bureau's "RadioWorks" logo as seen in a video on their web site.

WARNING: This one is very specific to the radio business.  Intense shop talk ahead.

Traditional Radio Industry Patriots — those who swear on their grandmother’s life that the AM / FM broadcasting industry in the United States is doing fine, just fine — are apparently now deluding themselves into thinking that they have a critical role to play in Black Friday and Cyber Monday.

This headline from Radio Ink graced my inbox first thing yesterday morning:

Radio Ink's "Radio Wrap" e-mail blast from Sunday, Dec. 1st, 2024.  

SUBJECT:
Radio Wrap: Why Cyber Monday Needs AM/FM

HEADLINE:
Black Friday & Beyond: Radio ROI Is Key to Holiday Retail Success

TEASER:
As Black Friday marks the start of the holiday shopping season, Cumulus Media Chief Insights Officer Pierre Bouvard is exploring how traditional radio remains a vital advertising platform for driving both in-store and online traffic.

Radio Ink’s article is just a summary of Pierre Bouvard’s own freely-available piece, so allow me to break the original down bit by bit.

The celebration of Thanksgiving and Black Friday this week marks the start of one of the biggest shopping seasons of the year.

With money on the table, both brick and mortar and e-commerce retailers need to capture consumer attention.

Okay, fair stage-setting.

Jon Stewart, leaning on his desk, chin resting on his curled hands, says "Go on..." with a knowing smirk.

AM/FM radio is highly effective at reaching these potential customers during the holidays with a massive 77% adult 18+ average weekly reach regardless of the season, according to Nielsen.

Ah, Nielsen.  The company beholden to the Big Boys™ of broadcasting.  The same Big Boys™ who bullied them into adjusting their methodology after the launch of Portable People Meter technology for use in radio because it accurately revealed how few people are actually listening and that the stations they’re listening to aren’t the ones the Big Boys™ want people to be listening to.  Yes, I’m familiar.

Even if we were to take Nielsen’s estimates at their face value, the figure Bouvard cites is rooted in what Nielsen calls “cume,” or the estimated total cumulative number of listeners over the course of a ratings period. The trend for the past 20 years has been that cume is consistently rising, but “TSL,” or “time spent listening,” is consistently dropping. TSL numbers matter just as much, if not moreso. TSL, for the longest time, was measured in 15-minute increments, or “average quarter hours” (“AQH”). If a listener is tuned into one station for five minutes within an AQH, that counts as time spent listening. That’s right, you don’t even have to listen to the full quarter hour! If you listen for just five minutes, that counts as a quarter hour in the ratings.

Oh, but it gets better! Starting next month, Nielsen will shorten the qualifying time to three minutes, because listeners are sticking around for one song, then tuning away when they don’t like the next song.  Now, if the radio industry were being run by actual radio people instead of bean counters, that change in listening trends would prompt programmers to git gud.  Instead, Inside Radio says that consultant Fred Jacobs and the Nielsen folks are blaming shorter songs and shorter attention spans, claiming that moving the goalposts isn’t actually moving the goalposts, it’s just keeping up with the times. Inside Radio also cites Nielsen’s own estimate that the change “would generate an average AQH increase of a whopping 26% ([in ages] 6+).”

In other words, this is all about lying to potential advertisers that their money is still worth spending on radio.  Sure, the lie can only go so far because advertisers do have the right to know at least some of the methodology, this stuff included.  But that doesn’t mean the station has to explain it up front or that an advertiser will even know enough to request the information.

In fact, for those of you who do still listen to the radio for longer periods of time, you’ve undoubtedly heard those commercials promoting ad time to potential advertisers, making the (already dubious) claim that “more people are listening to radio than ever before!”  That assertion is rooted in cume, not TSL.  If the majority of a station’s listeners are putting in only the five minutes that currently count as a quarter-hour, then ads already aren’t reaching them.  If that gets knocked down to three minutes, then ads definitely aren’t reaching them.

So you can see how trustworthy “the numbers” are, and how even more trustworthy the idea is that 77% of adults are being reached by radio at any given time.  Which is to say: barely, if that, and the numbers certainly don’t mean what sales staffs are telling their clients.

Bouvard continues:

In the week leading up to Thanksgiving, 77% of adults 18+ are reached by AM/FM radio. 78% of adults 18+ are reached the week of Christmas, making AM/FM radio the prime advertising vehicle for reaching shoppers trying to find last minute gifts.

And as if it helps to make his point, Bouvard shares a nice clean little bar chart showing that from Monday through Sunday between 6 AM and Midnight, 77% of adults are “reached” by AM or FM radio in the average week, 77% during the Memorial Day week, 75% during the 4th of July week, 76% during the Labor Day week, 78% during the Veterans Day week, 77% during the week of Thanksgiving, and 78% during Christmas week.

Again, all of which means absolutely nothing.  TSL is literally so far down in the sewer that people aren’t even listening the five minutes that it takes to register in the ratings.  Advertisers are not being heard.

AM/FM radio is an on-the-go medium, reaching consumers close to the point of purchase. 65% of all AM/FM radio listening occurs away from home, according to Nielsen. Advertisers who invest in AM/FM radio are reaching consumers at a critical time when purchase decisions are made.

That’s a crock of shit. Firstly, yes, the majority of what little radio listening is still taking place is done in the car. That’s been the case even before the advent of the iPod and Bluetooth. But the idea that consumers are making their shopping decisions in the vehicle on the way to do their shopping is beyond stupid. When shoppers go to a brick-and-mortar store these days, they’re going because they already know what they want, they’ve planned on where to shop, and they aren’t prone to changing or adding stops or purchases on impulse. Especially not with corporate price gouging being what it is right now; most people can’t afford it.

Americans travel to and from stores and are in their cars to visit loved ones during the holidays. This is good news for advertisers. A study from RealityMine’s USA TouchPoints shows on a weekly basis, 53% of Americans 18-64 have been in a store and their car in the same half-hour.

Yeah, that isn’t exactly disproving my point here.  Those are regular shopping trips made out of necessity and habit.  Those are shopping trips on which they already know where they’re going and what they’re going to buy.  Some of us still even make lists!

When consumers are in their cars, 86% of ad-supported audio time spent goes to AM/FM radio, according to Edison Research’s latest Q3 2024 “Share of Ear.” Shoppers hear AM/FM radio commercials that influence the stores they visit and brands they buy.

Then he shares a bar chart showing that figure, as well as 7% for podcasts, 4% for ad-supported satellite radio, 2% for ad-supported Pandora, and 2% for ad-supported Spotify.

Now, those numbers are extremely cherry-picked to the point of making Bouvard look like a sloppy hack (and he’s a sales analyst for Cumulus Media, so… yeah, that tracks). How do I know? Because Nielsen’s own piece about Edison’s Q3 2024 report shows that, regardless of location, AM / FM radio only gets a 67% share of ad-supported listening among persons 18+. Podcasts get 18%, ad-supported streaming gets 11%, and ad-supported satellite radio gets 3%.  And that’s not even accounting for subscription-based audio, which most of satellite listenership is, and a good portion of streaming music listenership is, as well.

Edison Research themselves — a reputable company, by the way — just published a piece last week that says “29% [emphasis mine] of the U.S. population age 13+ who listen to audio in-car do so on a mobile phone.” Edison notes that this doesn’t mean everyone in a single car is listening to the same thing over the vehicle’s audio system; it also includes situations like kids in the back seat with their earbuds in. I would also wager that Edison’s estimate is conservative. In fact, it was last year when they noted that time spent listening to on-demand audio (such as Spotify or Pandora) overall surpassed the time spent listening to linear (or “live”) audio such as AM, FM, satellite, or live streams. The only place where that did not hold true was in cars.

But, as Edison noted, that is changing.  Their 2024 “The Infinite Dial” report — the definitive continuous measurement of all audio modes and platforms — shows that while 70% of those 18+ who use an audio source in their primary vehicle listen to AM or FM radio, 55% also listen to online audio of some sort (paid or ad-supported), 32% listen to podcasts, 25% still listen to CDs, 22% listen to satellite radio (paid or ad-supported), and 16% listen to their own digital audio collection (meaning downloaded files).  Which, again, reveals the drop in radio’s TSL.

In other words, the idea that 86% of all audio consumption done in cars among those age 18 or older consists of listening to AM or FM radio… is just plain bullshit. That percentage represents a fraction of a fraction of a fraction, not a percentage of the whole, or even a percentage of all in-car audio consumption. You have to leave out a lot of other highly popular options to get to that 86% figure. And you’ll notice that Bouvard was very careful with his wording about that. While he didn’t outright lie and make that claim, it’s exactly what he wanted you to think he was saying. He withheld necessary context, leading the typical reader to the wrong takeaway point.

A study from the Radio Advertising Bureau and Dial Report shows that across categories, there was substantial store traffic lift among those who were exposed to AM/FM radio campaigns.

Ah, yes, the RAB; another impartial judge </sarcasm>.

The bar chart that he shared about this study reveals the data to be from 2018.  And that explains why I’d never even heard of “Dial Report.”  I had to do a little digging.  Apparently, back in 2016, radio ownership group Emmis Corporation started a subsidiary company called TagStation.  That company was charged with the maintenance of a mobile app called “NextRadio” and an analysis service called “Dial Report.”  NextRadio was basically just an FM tuner app that pulled additional information about whatever you were listening to from the web, but it also served to tell TagStation what you were listening to so they could produce analytical data for “Dial Report.”  The whole thing was a massive flop (because A: not all phones have tuners, and B: people wouldn’t use them anyway), and Emmis basically shut down all development on it in 2018.

In fact, the only direct link that I could find to any presence on the web for Dial Report was in a press release from 2018 — just two months before the shutdown — announcing that TagStation and Dial Report (as if they were two different things) had teamed up with WideOrbit, makers of very popular radio automation and advertising sales software.  I tried clicking that link.  It is now dead.

So Bouvard is relying upon outdated information from a service that no longer exists, and was producing limited-dataset analysis that wasn’t representative of the majority of radio listeners to begin with.

And again, even if all of that were the exact opposite; even if the Dial Report data was wholly accurate, it would still be utterly meaningless. “Those who were exposed to AM / FM radio campaigns” is a constantly-shrinking number, and that trend will only continue until the number is zero.

Home improvement retailers saw a 7% lift in store traffic. Quick service restaurants, lunchtime and dinner destinations for hungry shoppers needing to refuel, saw a 23% lift. Beauty retailers and car dealers saw the greatest lift of 32% each. AM/FM radio brings customers to the register.

Again, we’re talking fractions of fractions of fractions here.  Great, stores saw an increase in business among those few people still listening to radio long enough to actually hear commercials. A number which we’ve already firmly established is in the shitter.  What that should tell advertisers is that radio isn’t reaching new listeners, and you’re better off spending your money on more effective advertising platforms.

Bouvard continues:

For e-commerce websites, AM/FM radio creates significant digital impact. A recent LeadsRx analysis of 17 AM/FM radio campaigns reveals a +14% average increase in website traffic due to AM/FM radio advertising.

What he’s leaving out, and what you’ll see if you follow that link, is that their analysis — while billed as positive overall (because of course) — doesn’t exactly inspire confidence in the demographics of radio listenership.  The three companies who saw more than a 15% increase in web site traffic due to radio ad campaigns were all tax preparation services.  Two campaigns garnered a boost between 12% and 15%: an employment site, and a site for a health supplement.  Two other jobs sites, a jeweler, an apparel retailer, and another health supplement fell between 8% and 12%.  The mode grouping fell between 3% and 8%: an online therapy app, two financial institutions, another jobs site, a subscription manager, and an identity theft protection service.  A B2B tech services company only saw a 2.6% increase.

In other words, the most effective ad campaigns as related to web traffic were for older listeners who were already more inclined to listen to radio.  A demographic that is quite literally dying off.  You’ve already lost most of my generation (the Millennials), you’re barely getting any of Gen Z (who are now reaching adulthood), and you’re sure as hell not going to get Gen Alpha.  Radio is a dead-end medium for advertising.

He then goes on to share an infographic of data points from three other surveys, none of which really say much of anything.  A survey of 330 auto dealers reported an 11% increase in web site traffic when radio ads are airing.  38% of respondents credited radio ads for converting their product awareness to purchases on Amazon Prime Day (32% credited online ads, and 31% credited TV ads).  And a home improvement retailer reported that people who heard their radio ads three or more times were 49% more likely to visit their web site.

Which, again, great, you see a boost in web site traffic among those who are still listening to radio and, in at least two of the three cases, were already aware of the brand. In other words, radio wasn’t informing any new listeners, and wasn’t giving any new information to the listeners that were already there.  Radio was just providing that last nudge.  Which… isn’t nothing, but it’s not the big deal Bouvard is making it out to be.

He then cites this interesting claim:

According to multiple Nielsen return on advertising investment studies, AM/FM radio generates an average of $16 of retail sales for every $1 of radio advertising.

He then shares a chart of averages from those Nielsen studies between 2014 and 2019. A grocery chain saw $23 ROI for every ad dollar, an automotive aftermarket brand saw $21, $17 for a department store, $16 for a mass merchandiser, $15 for a home improvement retailer, $12 for a gas station brand, $11 for an unspecified type of retail, and $9 for another home improvement retailer.  Which, not to be pedantic, actually averages out to $15.50, not $16.  We are talking about money here.  Those fifty cents do matter.

And check that date range again.  This was all measured prior to the pandemic.  Shopping habits have changed dramatically.  Somehow I don’t think these figures are the same today… even though Bouvard is passing them off as if they are.

Bouvard finishes his piece by simply bullet-pointing the whole thing.

I will remind potential radio advertisers of the Securities and Exchange Commission’s mandatory disclaimer for investors: past performance is not indicative of future results.  And with past performance as lackluster as radio’s has been over the past 30 years or so, future results look pretty damn bleak.

Now, you’re probably thinking, “Josh, you don’t work in radio anymore.  You’ve sworn you never will work in radio again unless you own the station, which would only happen in the unlikely possibility that you win the lottery.  So why do you care?”

I care because I come from a time when radio was actually valuable.  I come from a time when we didn’t have to mislead our advertisers to keep them buying.  I come from a time when those working relationships actually meant something more than just exchanging money for time, it was a matter of providing a full service to the client.  I despise what the ownership groups have done to MY former industry, but even moreso, I despise that they’re trying to pull the wool over the advertisers’ eyes, particularly small businesses who would be better served by hiring a marketing manager to find the best advertising channels for their particular target demographic.

I care because I hate lying thieves.

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