Radio can be big winner in media reallocation for Big 3


Detroit’s Big 3 have grabbed all the recent headlines as lawmakers in Washington grapple with a proposed bailout solution to save the cash-strapped automakers. Changes are being demanded by Congress and proposed by the automakers. One change that needs to be addressed is how they allocate their ad dollars. According to a recent analysis of BIGresearch’s Simultaneous Media Usage Survey (SIMM) database by Prosper Technologies, wide gaps exist between how ad dollars have been spent versus what consumers say works best when it comes to buying a car.

Prosper Technologies developed a new Media Allocation Model that utilizes the SIMM Survey of over 18,000 consumers to determine “what” and “which” media forms are most influential to consumers for buying a car, the consumption of the media and pricing of various measured media.

The results represent the first cross platform, consumer-centric media planning and allocation tool. The service will enable advertisers such as the automakers and their agency partners to dramatically increase the effectiveness and efficiency of marketing communication and increase their ROI.

Said the report: “One glaring difference is the disproportionate allocation of spending on TV versus other media. An example is that the amount of radio consumed, its influence to purchase, combined with lower costs makes it a stronger media option, which according to consumers is under-utilized. On the other hand, the percentage of dollars spent on TV is not relative to its influence to purchase, consumption and cost.”

Source: Ad Age Domestic Ad Spending by Category (2007)/Measured media from TNS Media Intelligence’s Stradegy, Prosper Media Allocation Model
*% of Total U.S. Advertising Spend in 2007
**Media influence weighted by consumption and media cost for people planning to buy/lease a car/truck in the next 6 months

BIGResearch President Gary Drenik tells RBR this should help radio get out of being mired in its “gross audience estimates and people meter crap. In the meantime, they’ve forgotten about the customers. They’ve got a real problem. They’re going down and their clients are going down. Yet, they keep offering them more of the same.”

Drenik thinks the radio group heads, the industry, the RAB should get using this right away. “Who are these leaders that their stock is selling for 10-12 cents right now? Are they going to sit there and watch the darn thing go down the drain, or are they going to take a stand and say, ‘We’ve got to start selling the value.’ Because the only value they have is what their consumers/listeners buy.

It has nothing to do with how many AQH—that’s the agency lingo to beat [the radio industry] down…The CEOs and RAB ought to be running in and sitting down with the marketers. You’ve got these auto dealers out there that are dying, and they’re going to have to do this bailout. Do you think they’re going say, ‘Well, just keep spending money on television like you’ve been spending it?’

So somebody is going to need to come back and say, ‘We can help you because our information is based on people planning on buying cars—and those are the only people that matter to you right now.’ It’s so simple.”

The new Prosper Media Allocation Model is a result of analysis of BIGresearch’s Simultaneous Media Usage Survey (SIMM) by Prosper Technologies. Prosper Technologies collaborated with Martin Block and Don Schultz of the Medill School at Northwestern to analyze SIMM Surveys over six years to develop the Prosper Media Allocation Model.

A complete book on this is to be released next week.

“These findings are nothing short of a complete re-think of media planning,” said James Geoghegan, President of Media Head.

See the charts specific to GM, Ford and Chrysler.

RBR/TVBR observation: Indeed, what’s really amazing when you look at media influence weighted by consumption and media cost for people planning to buy/lease a car/truck, radio really gets a huge bang for the buck. The Big 3’s percent of total US ad spend in 2007 was only between 1.9% and 3.5%. However, according to the weighting, it was a whopping 21.5%–the highest influence of all media. Television appears to be on the opposite side of the fence, with 39.1% to 43.2% of total US ad spend in ‘07. However, the weighting took it all the way down to 17.3% of influence. This report will be an asset for radio sales pitches—especially when clients are in the midst of reducing overall spend next year.