Brand managers need reassurance of ROI on radio to spend more on the medium.
The economics of media are brutal. With TV, they depend largely on a Peoplemeters system that tells you who is watching what and when. Like any other system, this one has its issues but it remains the best yardstick marketers have before they go about the business of disposing of millions worth of advertising budgets. The TV industry can continue to debate the merits and demerits of Peoplemeters, but the reality is that other industries which have either adhoc measurement systems or none at all are even worse off, because with TV there is at least some documented proof that the ad spend might actually deliver some ROI.
Radio is another story altogether.
A brand manager once asked me what guarantee did he have that the money he was spending on radio was actually delivering. My honest reply was there was none. With radio we still depend on gut feel. Our only reference is a quantitative study carried out three years ago and some minor updates thereafter. Yet, in the radio world, especially FM radio, the industry is so dynamic that a study carried out six months ago might not be relevant today. The brand manager in question decided to reduce his radio budget by half and divert the rest to Facebook. At least, his marketing plan seemed hip. I don’t blame him.
Yet if brand managers were more confident of their ROIs on radio they might spend more on the medium, which begs the question of why is there no radio measurement system in place.
#### Brand managers need reassurance of ROI on radio to spend more on the medium, says Syed Amir Haleem.
A major reason is that the meter which records listening habits costs almost as much as the meter used for TV, and according to Salman Danish Naseer, CEO Medialogic, the cost of obtaining a decent sample size worthy of analysis is prohibitive. Given the differences in the ad budgets of the two mediums, radio apparently doesn’t justify the investment.
Setting aside the cost factor there are other areas of concern. For one thing what are you going to monitor exactly? With TV, all the channels, except for a few terrestrial ones, have a satellite footprint. This essentially means that what a person is watching in Karachi is exactly what another person is watching in Bhai Phero. Hence, if one knows what a certain SEC audience is watching across a few cities, one can draw ‘directional’ conclusions of what the entire country is viewing. With radio, especially FM, this is not the case.
Shahzad Qureshi, COO, FM 107 admits that with a few exceptions every city has its own programming, but then this is precisely the charm of radio and what makes it so relevant to audiences – it is local. However, the implications are that any investment in a city will only tell you what the listenership habits are in that city only. In other words, not only is the investment in term of equipment the same as TV, it is multiplied at least six times because more devices are required to capture a bare minimum picture across the country.
Complicating this issue further is the fact that at the moment most media planners are sitting in Karachi. They have no way of knowing how a time slot is doing across stations in a city like Sukkur for example. The current practice is that advertisers use their on-ground sales force as their source of feedback and this feedback is based on what these individuals have experienced in each city. I was surprised to see that this is a common practice among different advertisers. Necessity is the mother of invention, as they say.
Other issues include everything from forming a radio body to the core technology that captures data. Unlike TV meters which quietly sit next to a TV set and electronically monitor changes in frequencies, radio monitoring involves actually recording small voice clips periodically as people move about their day. These sound bites are then matched with different recorded sound bites obtained from all the stations to find out what a person was listening to.
So while the guy at the data collection centre can hear you listening to bhangra on an FM station, he can also hear your mother-in-law telling you how her daughter wasted her life by making a certain decision. Disturbing?
Being part of the Pakistan Broadcasters Association has not helped radio’s cause much. Maybe because radio represents such a small portion of the total broadcaster’s revenue base. A distant hope is for radio to try and form its own body.
In the short term, however, there is some relief. One of the more respected media buying houses in Pakistan is planning to carry out a large independent quantitative study in the next six months. Let’s hope they will also incorporate some of the learnings of the last one (which became the object of much controversy). Even so, with some reassurance of how hard the advertiser’s rupee is working on radio, the medium might experience a small windfall in 2013.
Syed Amir Haleem is Hub Business Director, CEEMA, Ogilvy & Mather. email@example.com