(By Marc Greenspan) When attempting to grow the radio pie, a smart sales rep will often talk to those advertisers who are not familiar with radio terminology. They may be unfamiliar with GRPs and CPP, so as a representative of radio and your station, you need to recognize that and speak their language – let’s talk spending power.
All these potential radio advertisers care about is whether or not their investment in your station (or cluster) is going to increase their bottom line. Simply put, “Is this going to make my company money?”
Clearly, you need to take a different tack.
Many stations have taken their weekly cume and converted that into dollars spent. Often called Spending Power, this is available in some Nielsen Audio software or Research Director, Inc.’s sales tools. Both use the same data source: Devonshire Associates Ltd. What makes this tool so effective is that it breaks spending in the local market into 118 different categories. Therefore, you can not only be market-specific, but also use a category that is appropriate to that advertiser.
A new car dealer may not care that you have 262,600 people tuning to your station, but they do care if this data shows that your listeners will spend $1.16 billion at new car dealers over the next year. That averages to:
- $96,700,000 per month
- $21,200,000 per week
- $3,000,000 per day
Imagine the impact of documenting that your listeners’ average spending on new cars is over $20 million per week. Without advertising on your station, how will this car dealer get your listeners into the showroom? They will spend their new car dollars somewhere else.
This same effective positioning statement can be done for just about any potential advertising category.
One word of warning: while this data varies across markets (which is extremely important), it treats all people in a specific market the same. It is based on your Nielsen cume and does not factor in a specific station’s qualitative profile.
This column is part of a series titled “Growing the Radio Pie.” To view past articles, visit The Ratings Experts at Research Director, Inc. online here.
Marc Greenspan is the CEO and founding partner of Research Director, Inc. He can be reached at 410-295-6619 x11 or by email at [email protected]. Research Director, Inc. offers consulting services to media companies to help them grow their audience, ratings, and revenue. Read Marc’s Radio Ink archives here.
