Marcia Owens-Reder is Local Insights Lead at MMi.

After many years of hearing from agencies – both big and small –  that posting radio is not an industry standard, given advances in technology and measurement we submit that it is far past time for transactional accountability in this media channel.  At MMi, we have been speaking with clients and agencies about better accountability in radio for years.  Negotiate some kind of audience guarantee, and post your schedule to determine whether the guarantee was met.  Secure restitution if it was not.  Those clients and agencies that actually heed the advice and make the effort end up receiving better accountability on some level.

And yet, so many agencies remain (apparently) unwilling to make the effort.  I’ve experienced many an eye roll (Zoom does have its advantages) when the subject is broached with agencies, even today.

It goes something like this:

“nobody does it”

“none of our clients do it”

“the stations won’t guarantee it”

Radio Still An Important Media Channel

First, let’s start with some industry facts.  Based on Nielsen research from March 2019 (this is admittedly pre-Covid, and we are assuming that there will be a return to “normalcy” at some point):

  • Radio reaches 92% of Americans each week, more than any other Nielsen measured platform
  • 272 million Americans 6+ listen to radio each week
  • Country is the number one format
  • More consumers trust their radio personalities to tell them the truth versus other mediums.

In short, radio is still an extremely important advertising medium for many advertisers – large and small.

Commercial audio is for the most part still free to listeners, available to every consumer on the road today, and at your command with the assistance of Alexa or Google.  Radio advertising is less expensive than most major media, allowing advertisers to afford maximum reach and effective frequency, assuming that purchased schedules deliver the communication goal.

Ah, but you know the old saying about those who assume.  Advertisers create media plans to meet communications goals.  Buyers purchase media weight to those plans to meet the goals.  If the buys deliver at those weight levels, the communication goals are met.  Posting on “spots” doesn’t answer that question (“We ordered 50, we got 50.”).  What if ratings were up (or down) vs. your assumptions back in those media plans and buys?

Get with the times! Post your radio buys.

It’s (Past) Time For Accountability in Radio

So let’s get back to the main point and why clients should expect their agencies to estimate, steward, post and receive guarantees for all their radio buys. If we need a starting point, some baby steps if you will, let’s at a minimum get on board with PPM and CDM markets, shall we?

  • 30 out of 48 PPM markets are accredited by the MRC (Personal People Meter markets are measured by passive-listening devices worn by a panel of solicited volunteers)
  • Continuous Diary Measurement (CDM) is available in 46 markets since August 2019.  This methodology improvement uses a rolling panel of solicited volunteers to record their listening, resulting in measurement nearly all the time vs. in limited “sweep” months.
  • Data is available on a monthly basis for both measurement types.  CDM monthly books are based on a rolling 3-month period to maximize stability.
  • Combined, these markets represent 80% of the ad spend and population.  

Both PPM and CDM markets provide more stable measurement and allow media buyers to react more quickly to marketplace changes.  Sampling is spread across 48 weeks per year in the metro.  

So why are agencies still opposed to posting radio?  What is the point of having a media plan with communication goals if the results are not measured and there is no accountability on the part of the seller for delivering the agreed audience?  

Let’s Look At An Example

Say that the media planner deems that a 50% reach with an 8x frequency per 4 weeks is the necessary goal to achieve success for a specific Brand.  Based on the anticipated station mix, their relative rankings, duplication, etc. it is determined that 400 Gross Rating Points (GRPs) will deliver that 50% 8+ per 4 weeks.

And if we make that buy, and post the schedules, here is what happened (still pretending):

What happened?  We spent our planned dollars at our planned cost-per-GRP (CPP) and purchased 400 GRPs, the amount determined necessary to meet our goal.  We bought 2,000 spots to achieve those 400 rating points, and we received 2,000 spots.  The spots all aired.  However, we actually received only 200 GRPs.  

Regardless of whether the planned CPP is based on SQAD (syndicated industry cost resource) or historical data, the result of not delivering the GRPs is the same.  The client pays twice as much per rating point and receives half the desired exposure. The 200 GRPs represent a substantially lower reach/frequency combination than what was determined necessary to accomplish the objective, and thus the communication goal was not met.  

Importantly, if we post based on the number of spots (shockingly, still a common practice, even at some large and sophisticated agencies), then we never know our communication goal wasn’t met.  We bought 2,000.  We got 2,000.  Mission accomplished!  Except, not really.  We didn’t get what we set out to get, and we’ve swept the entire issue under the rug by not even checking, whether there is a guarantee in place with the seller or not.  Isn’t it in the best interest of the agency to deliver the communication goals to support the client’s success?

Importantly, agencies which “post” radio schedules on the same book which they estimated them on are essentially posting on spot counts as well.  This still doesn’t address how the advertiser’s schedule actually performed and is a holdover from a time when ratings measurement was less precise and more volatile.

It is easier to buy radio this way (not posting it or negotiating delivery guarantees).  And cheaper for the agency – and certainly the seller.  And there’s no risk of having to explain why a market didn’t post.  But is it better?  In the past, buyers and sellers could make a legitimate case that the audience research was problematic.  That is much less of an issue now.

Media Buyers (And Advertisers), Fear Not

Many of the same tactics used by buyers to ensure a post on television apply to posting radio.  Diligent estimating and stewardship tactics apply here, just as they do in TV – particularly in PPM and CDM markets.  Here are some tips to hedge your bet when it comes to posting radio:

• Choose the books to average that most accurately reflect the current marketplace and seasonality.

• Look at station trends, hour by hour ratings, audience composition and turnover to guide station selection.

• Avoid broad rotators unless the rate and rating align with the reality of where the spots will run.

• Rely on tried and true stations and formats.

Don’t put all your eggs in one basket.  Buy a station’s audience and not an individual daypart.  Specifically, buy across the day to compensate for fluctuations.  If possible, flight stations with similar formats and audiences to expand the reach and offset the impact of ups and downs in listenership from one station to another.  

Many agencies employ these good tactics already.  But then they shut their eyes and hold their breath and simply hope everything worked out.

Crank Your Accountability To Eleven

Now for the latest news.  Nielsen is going to no longer publish ratings for any station that does not subscribe to their service. For as long as I can remember there’s been a wink and a nod between agencies and stations regarding using ratings to evaluate a station’s audience. It’s a lot cheaper for agencies to subscribe to Nielsen than for stations. So an agency subscribes, and tells a station where it needs to price.  Nielsen’s goal is to stop stations from benefitting from essentially stealing the audience data.  If a station doesn’t subscribe, there is no data.

This change is effective with PPM markets in January, 2021 and for CDM markets in April, 2021. This certainly might backfire on Nielsen.  It essentially opens the door for a cheaper competitor, and since radio is the epitome of local advertising, the heritage and dominant stations in the market will likely be purchased regardless, at least for a while.  Having said that, Nielsen expects the impact in the PPM markets to be minimal, stating that 97% of the top 20 stations currently subscribe. Ultimately, it benefits the entire ecosystem for there to be reliable, transparent, independent audience measurement available to all parties at a cost that is reasonable for each party given its business model.

Ultimately, most stations in large markets do subscribe to the ratings and will continue to do so.  Stations do guarantee ratings; just ask.  Mother always told me, if you don’t ask, you don’t get.  If you can’t get a guarantee at the station level, you may be able to get one at the station group level.  If a station or ownership group in a PPM or CDM market refuses to stand by their product, leave them off the buy for a campaign.  The marketplace is too competitive, especially in the larger PPM and CDM markets for stations not to play ball.

With all the different media platforms available today, the ad-supported radio industry cannot afford to shun accountability.  Agencies shouldn’t either.  To do so is simply irresponsible.

Mike Fuhrman, Account Director at MMi, contributed to this post.

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