How To Select Radio Stations
The Basics of Direct Response Radio / Part IV
Who delivers your best prospects?
Radio stations work hard to attract and keep a loyal audience of listeners in fairly narrow demographic ranges (e.g. Males 25-49, Females 35-44, Persons 45+). Within those broad Target Audience demos there are subsets of people, your own Qualified Audience. They might be homeowners, engineers, college grads, etc. How do you decide which stations best deliver your QA?
The single most important metric you can use to evaluate any single station, group of stations, or network is QA CPM - short for Qualified Audience Cost Per Thousand.
Reach, frequency, GRPs, etc. are useful ideas. But every commercial you run confers a unit cost on you defined by QA CPM. The Cash Out necessary to buy one commercial or a six-month flight must be recouped from the Cash In from sales, primarily to your Qualified Audience.
TA & QA CPM
TA and QA CPM is the cost of a commercial divided by the 000's of TAs or QAs listening. It's also the base P12+ or P18+ CPM of a commercial divided by the percentage of listeners who are TAs or QAs.
Say the market-wide competitive P18+ CPM is $6.50. WOPQ's AQH (M-F, 6a-10a) is 10,000. They charge at least 10 x $6.50 or $65 for that spot.
Assume your TAs are 50% of the AQH and your QAs are 20%. So your CPMs are:
P18+ CPM = $6.50.
TA CPM = $6.50/.50 = $13.00.
QA CPM = $6.50/.20 = $32.50.
P1 QA CPM = $6.50/.14 = $46.40!
Clearly you want to run your spots only in those stations that deliver a very high percentage of TAs and QAs.
You want your message to appeal to as wide an audience as possible, so set your TA and QA definitions broadly.
[Males aged 45 to 59 who are executives, college educated, homeowners, household income of $75K or more] may well be your marketing target. A more useful TA is [P45+] (those guys have wives!). A more useful QA is [M45+, HHi $75K+].
"But what is P1 QA CPM?" you ask.
Loyal Listeners: 70% of Weekly Cume.
On average, about 68% to 75% of a station's weekly cume are people who Prefer that station to all the others in the market.
They're called P1s. They give most of their listening hours to that station. P2s prefer it to all other stations but one. Most people listen to the same three or four stations. P1s, P2s and P3s are 90% to 99% of Weekly Cume.The more spots you buy on a station, the more times you reach the same P1s. You do not get a broad market reach on any one station. You do get frequency against a small slice of that market.
Ratings services such as Scarborough and Qualitap can parse all the rated stations in a market for TA and QA Cume & AQH. You may hear something like, "We have the largest adult audience in town!" from a local rep.Just rattle off the age and gender demo of your TA and ask for a Scarborough Cume Ranker on your QA.
Most stations will deliver the same relative percentages of TAs and QAs in every day part. So in the example above, P1 QA CPM is $6.50 / (.20 x .70) = $46.40.
Add P1 QA Cumes to Achieve Reach.
Radio is used as a frequency media by local retailers who get in bed with four or five stations. But you may want to reach all or most of your QAs. How many stations do you have to buy?
Say there are 250,000 QAs (P45+ earning $75+) in a market. Ask your rep for a cume tanker. Qualitap or Tapscan will spit out a list of all the stations in town ranked by QA cume.
Multiply each station's QA cume by 70% to get its P1 QA cume. Start at the top and buy down the list until you run out of money or until the P1 QA cumes add up to about 250,000.
Your spreadsheet would look something like this:
Notice that the "best station" in town, WPQR has a huge P18+ cume, but a tiny P1 QA Cume. You can drop it off your buy-list and still reach most of the QAs in the market.
BUY SPARINGLY! You won't need a huge frequency on each station, because most of your QAs are P1s, P2s or P3s of most of the stations on the list. If you don't get them on WABC you'll get them on WJKL.
PRACTICE WHAT I TEACH: Assume that all those stations charge $6.50 per thousand for P18+ :60s. Turnover is 5 for all stations. Compute the P1 CPM for each station. Simple arithmetic.
///\\\
Before we get into tracking and planning, let's review what we've covered so far.
1. Frequency can build response over time.
2. Every brand has a unique Optimum Frequency Range.
3. QA Cost Per Thousand is the most important metric of any radio station.
\\\///
OK so far?
You now know how to evaluate stations and determine your TA and QA cpms in any day part. How will you track Media Cost Per Sale?
Cash In : Cash Out is the most common method. But response rate, CPM, and conversion rate affect MCPS. You'll need a more robust method to track all three simultaneously: GM/C = X.
Intro DR Radio v Print How Frequency Builds Response How To Select Stations
GM/C = X versus CICO How To Test & Roll Out Click-to & 1-800 DR
