December 1, 2015

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First Mediaworks

Harnessing The Power Of The Urban Radio Audience (05/23/05)
By Reed Bunzel, Editor-in-Chief

Fact: African American consumers in the U.S. will spend $656 billion this year on products and services, and that figure is growing annually.
Fact: In the past few years, Urban radio and its varied formats have emerged from niche-market status to defining today's general American music market.
Fact: African Americans traditionally spend more of their income on goods and services than their general market counterparts with the same income level.
Fact: African Americans rapidly are becoming second- and third-acquisition consumers, which means they are buying second and third homes, second and third cars, etc.

Why is it, then, that so many advertisers and agencies still regard the African American consumer as secondary in their media plans? The answer is simple: Deep-rooted misperceptions and prejudices continue to lead many top advertising decision-makers to underestimate or completely overlook the buying power of the Urban radio audience. Despite clear evidence to the contrary, many Madison Avenue executives (and Main Street retailers) still think it is sufficient to buy only one Urban station in a market in order to reach the entire African American community. “Blacks don't buy luxury cars or computers or new refrigerators,” their thinking goes. “Better to spend those dollars on yet another female-leaning Adult Contemporary station than that Urban AC outlet.”

How wrong they are. Those myths were exploded at Interep's Power Of Urban Radio summit, held last month in New York. The one-day symposium took a long, hard look at the emergence of the Urban radio market as the new American general consumer market. Sessions focused on the integral role of African American consumers in today's economic and cultural landscape, and marketers' efforts to secure relationships with Urban consumers. As one panelist noted, “Local Urban radio hits the consumer where they work and play … clients need to change their perspective regarding radio, taking it more seriously and doing a better job of budgeting for the Urban consumer.”

This year's event was co-chaired by a triad of Urban radio leaders: Inner City Broadcasting Corporations President/COO Charles Warfield, Radio One Vice President/Operations Zemira Jones and Emmis Senior Vice President/New York Market Manager Barry Mayo. Radio Ink took the opportunity to sit down with all three executives for an in-depth discussion about the evolution of Urban radio, the changing composition of the Urban audience and the consumer power of the African American community.

INK: Is the greater advertising community aware of the strength and vitality of the Urban radio audience?
Yes, absolutely they are growing more aware of the Urban radio community, because it's becoming general market. The numbers are there, the ratings are there. If you look at the population - who's buying products and how this audience over-indexes in so many important categories - you begin to understand the impact this audience has on trends and culture in this country. There are advertisers such as Mercedes Benz that you might not expect to “get it,” that are looking beyond the numbers. Mercedes Benz has been advertising on our Urban radio hip-hop station for a couple of years, which you wouldn't have expected a few years ago. Of course, we still have our challenges. There still are people who don't understand, who tend to devalue the audience. It's our job to fight that.
Warfield: The advertising community certainly is becoming more aware and accepting of the power of Urban radio, but there still isn't a full respect for the format or for the audience it delivers. An undervaluation of the importance and economic vitality of the African American community is connected to that.
Jones: Many advertisers are woefully unaware; some have only a marginal understanding, and therefore underestimate it. Others totally misunderstand it, and bring predispositions from prior experience, lack of experience or biases they grew up with. All these get factored into their buying decisions. Many advertisers have a “scotoma” regarding the power of the urban audience.

Can you define scotoma?
A scotoma is a blind spot. Everyone is familiar with the concept of a scotoma; they just don't know the name. At the dinner table, your friend asks you to pass the salt; as you're looking for it, out of impatience or frustration your friend reaches across your plate and picks up the salt. Everyone understands that experience. It's a blind spot. No matter how hard you looked for the salt, you couldn't see it.

How does this apply to the Urban radio audience?
It's a condition we all have from time to time. Just as we have it at the dinner table, we have it in the board room, the office, when we're working on our media plans and when we set up our business strategies. Media buyers have it when they're trying to do a good job. I'm not talking about a mean-spirited discounting of African Americans; I'm saying that a predisposition to scotomas, coupled with biases, leads to blindness. That's what has happened with Urban radio, and that's why an AC station can have a 1.5 or 1.7 conversion ration, while its Urban counterpart with even bigger ratings can have just a 1.0. How do they explain an almost 30 percent difference in revenue conversion? They say, “It's because African Americans don't have the same buying power.”
Warfield: I call them misperceptions. People have made assumptions about Urban consumers' household income, about whether or not they purchase luxury items, luxury cars, or take vacations. One challenge we have is that, unfortunately, we find ourselves still qualifying our audience, because we have to overcome these misperceptions. Research supports us, but often there's a lack of information, knowledge and involvement with that community when people make decisions that are not in the best interests of their clients. It's unfortunate, but it's a reality about this country.

Urban radio really isn't a format - it's a community. What are we really talking about here?
It isn't a format because there isn't one element that is all things to all people in servicing the Urban community. There's hip-hop; there's Urban contemporary; there's adult Urban contemporary; there's gospel, which some people call contemporary Christian or inspirational. There are various formats within that Urban arena, and many of these formats do very well in their markets. They provide very vital services to the community, touching young and old, but still addressing their desire and interest for the information provided by our radio stations, and the entertainment they've come to expect from us.
Mayo: The easiest way of seeing this is to recognize the influence that hip-hop has had on general culture. The fact is, hip-hop is mainstream music. Look at record sales: When an artist like The Game or 50 Cent can sell more than a million copies in one week, you know that's not just coming from African Americans. Go to any suburb, go to any high school, go to a roller skating rink: Hip-hop is mainstream music.

Is there a defeatist sense, maybe even a self-fulfilling prophecy, that urban stations can't achieve the power ratios of other formats, so why even try?
We always come back to this issue of power ratios not being comparable to similarly rated radio stations in major markets. While a Lite AC station might do a 1.5, 1.6., 1.7 power ratio, we're delighted if an Urban station gets just a 1.0.
Mayo: To some degree that is absolutely true. Having said that, however, there are some AC radio stations with audiences that are similar in size, or even smaller than some Urban stations that have power rations of 1.5 or 1.75. That's advertiser perception, plain and simple, and that's our ongoing fight.

How does that perception get propagated?
Here's what happens: You have a general market station that's ranked fifth, and an Urban station that's second, adults 25-54. But, the general market station that is fifth rank out-bills the urban station. Now, the buyer says, “Look at the index and the qualitative. The index shows that white folks buy this product at a much higher propensity of purchase than their African American counterparts. Mathematically, they are correct, but we know that statistics don't tell the whole story.

So what do you do if you can't trust the quantitative and the qualitative?
Here's a general market example of the duplicity of the economics. News/Talk stations have a schizophrenic impact on media buying. They are perceived as one of the most upscale formats in radio, yet many poor people listen to News/Talk. When you look at demographic skew, there's a peak around 35-44, then the audience goes down in competition and then it skyrockets again at around age 64. No other format does that. Every other format grows to a certain demographic and then declines. There is significant bifurcation. You also have that in Urban radio. The difference is that Urban radio - African American-oriented radio - has a cocooning effect that bonds the well-off with the survivalist. So, the very poor African American drinks at the same trough as the very affluent African American. The mathematical mean is brought down, and media buyers because they don't understand the African American lifestyle and its own bifurcation miss it. They've been brought up to look at African Americans as a homogenized being. They super-simplify, and come to erroneous conclusions.
Jones: African Americans buy many products at a disproportionately high rate, but some people just don't see. Even Scarborough sometimes doesn't capture the essence of what's going on. I was in a meeting with a very accomplished general manager who has been running stations for 20-30 years, and he made a comment about how Mercedes doesn't advertise on hip-hop stations, because people interested in hip-hop can't afford a Mercedes. He was totally oblivious to the fact that Mercedes has been a long-standing and successful advertiser for years on our hip-hop stations around the country at Radio One, and other companies. If general managers of radio stations have that same scotoma, why wouldn't a media buyer, who makes a fraction of what he makes, have it?
Mayo: I've been doing this now for 29 years, and I will tell you that part of it is ignorance among some advertisers - those who don't understand the efficacy of the audience, or the value of it. The other side of the equation is that some stations - and I'm not talking about Emmis stations - do not have the best sales talent. If you want to win the championship, you have to have the best players. I have long believed that you should have a mixture of salespeople from the general market and from traditional Urban radio.

It seems as if we come back to the perception that many advertisers and agencies have about the Urban radio audience. Why is the power of the African American consumer so elusive to them?
African American consumers aren't elusive; they're right in your face. Scotomas allow you to miss them. They are the average consumers who happen to be African American, who have merged out of economic obscurity into a powerful monetized force. They consume at a voracious rate. Many have been in the period of first acquisition for decades; they've gone from first acquisition to second and third. They're buying second homes, third homes in some cases. They're buying luxury cars. The upside for manufacturers is that African Americans now have enough money to consume, and they consume at a disproportionately high rate. They spend more of their capital on goods and services than their counterparts. So, the African American making $50,000 spends like someone who's making $70,000. If you don't understand that difference, you'll pick qualitative parameters that don't tell an accurate story.

Do you still see non-Urban dictates?
Sure, but no one's unintelligent enough to put that in writing. Various industry groups are fighting non-Urban dictates, but they do still exist. Some advertising groups still under-utilize Urban radio, or don't utilize it at all, but that stems from the misperceptions about our audience. In the worst cases, it's an absolute prejudice.
Jones: The ad community is much more politically astute today. Years ago, they would say, “We don't buy Urban; we don't buy black radio. It's just not part of our media mix.” Today, it's not politically correct to say that, so they come up with different ways to say it - but it's the same thing. If you're in a marketplace that's 20-30 percent African Americans and you don't have any Urban stations in your mix, or if you only buy Urban during Black History Month to make your social statement, well - what is that?
Mayo: It's not good, because the radio station doesn't get an equal opportunity to pitch for certain business. It's way better than it was 10 years ago, but it still exists; it's just gotten a lot more sophisticated. It comes out in different ways. Again, it takes sophisticated, marketing-oriented sales teams to address it. The client may have no knowledge that their agency representative is doing it. At times like that, we have to go directly to the client, and make sure they understand what they're missing in the urban audience.

Do Urban radio salespeople need special training to break through some of these barriers?
You do need specific training for this format, just as you would for any of the formats that are specialized in their content, or not as mainstream or whose backgrounds may not synch-up with the agency's front office. We are human beings, and we gravitate toward things like us. So, if you have less of an experience with Country, you'll need more education. If you have less experience with African Americans, you'll need more education. The salespeople in Urban radio must have a bigger toolbox when they walk in the office of the decision-maker.
Warfield: I believe our sellers are properly equipped. Some organizations do their own internal training, others bring in external trainers. We use a combination of both. Our sellers must have a passion to go out and represent the audience that we deliver to these advertisers. Frustration still stems from the fact that, before we can compete on a level playing field with the other top-rated radio stations in the market, we must qualify our audiences. Our staff has to have a passion to go out and do that. They must understand that there may be an extra step here. It's not fair; in a perfect world, people would be educated about the vitality of our Urban consumers, but they're not. They choose not to be, or they're too young to know. Part of our challenge is to educate them; if they give us the time and the opportunity to do that, our staffs have the tools to provide the support that decisions-makers need to make the right decisions for their clients.
Mayo: Historically, our industry does a poor job of training overall. It does take an above-and-beyond effort in marketing solutions-based, customer-focus-based training, not the same basic training we've seen for years. We need to be more sophisticated about that. For an Urban-formatted radio station to maximize its revenue potential, it needs to have one of the top three sales staffs in the market.

Because advertisers typically don't place buys on more than one or two Urban stations, do you see more competitive selling against other stations than in the overall radio industry?
It certainly does go on, and in the long run it's not constructive. When you're told that an advertiser will only buy one Urban, it impacts the entire Urban platform. Most Urban broadcasters, therefore, are teaching their sellers to sell the value of their stations and the value and the vitality of that audience. Rather than selling against one another, we are selling marketing solutions to our clients. Our sellers are taught how to sell the value of our properties and our audience, and not to spend a lot of time putting down another broadcaster. The industry must get better at this, because it's not just within the Urban arena that it happens. Many broadcast groups have sellers who sell against individual radio stations. We should be selling the value of the industry, the importance of the industry and how well the industry works.
Mayo: Depending on whether they're good marketers and salesmen, they're tailoring their presentations to the needs of the client they're pitching to. I'm not apologizing, or complaining about people who don't get it. It's our job to educate the clients and agencies about the efficacy of this audience, and the best way to do that is with the facts. You don't have to get slick, or be a fast-talking salesperson; you have to do a good job understanding the research, and presenting the numbers.

What grade would you give Arbitron for its efforts in measuring the Urban radio audience?
At one time I'd give them a B; today it would be a C. They are victim to the research dynamics of connecting with African Americans. It's tough to find them, it's tough to get them to respond just like Latinos and young white males. Arbitron has difficulty getting accurate information. When you don't have a large enough sample size, you can't dig deep enough into the group's media realities. I'd give them a C, because their research is not as reliable as we would like. They're trying, but they're a victim of today's research woes.
Mayo: I don't believe Arbitron is trying to run away from the problem, or ignore it. They admit that response rates in general are abysmal, and sampling among the African American audience is hit and miss. The New York book that was just released had the lowest number of black in-tab diaries since the summer of 2000. That's just not good enough. When that happens, certain types of stations that rely on some level of African American AQH to drive their overall ratings take a hit every time. They have to do a better job. It will be interesting to see in the future, with the advent of the People Meter, how that impacts this issue.
Warfield: I believe Arbitron does a good job. They're our partners. You can't live without them, and sometimes you feel you can't live with them. They do a good job with the technology available to them. There are ups and downs, and we do have issues and concerns across various segments. I'm not critical of Arbitron in that regard; we always think they can do a better job. They make the argument that they can do a better job, and will do a better job, if we're willing to pay more for the service.

How would you expect the Portable People Meter to affect your reported listenership?
One of the things I'm very concerned about with PPM is the potential reduction in TSL. Is it real or not? Is it a reflection of exposure to media, or actual listening to media? Their argument is that we will see greater cume. But, the reality of our format is that Urban listeners stay with us for a long period of time. As they get older, they will spend time with some other formats, but their preferred format still remains some variable of Urban. I still need to be convinced that the PPM is going to reflect those tendencies and habits of our audience.

How would you expect the evolution of new entertainment media - satellite radio, iPods, new cell technology - to affect Urban radio listenership?
You'd have to have your head in the sand to not acknowledge the attrition in persons using radio during the past few years, as a result of technology. It's not just one thing; it's all of the above. Having said that, I think ethnic-based formats have far better protection than their general market counterparts, because radio is more important to Hispanic and African American listeners than it is to general market and white counterparts. This is a cultural thing and, in many cases, a community-based bond we share with our audiences that a lot of general market stations just don't have. I'm not saying African Americans aren't buying iPods; they are. But, they aren't giving up their radio stations for their iPods.
Jones: Years ago, the phrase was coined: “Content is king.” I haven't seen anything out there that changes it. One thing has been constant: Technology continues to evolve. They've been talking about radio's demise since shortly after Marconi left the room. They said TV was going to do it, and then VCRs and 8-track tapes. They talked about it with every technological advancement you could think of and still, 95 percent of Americans use radio every week. The sheer fact that radio has a way of intimately bonding and creating a sense of community has allowed it to survive a tsunami of technological advances, and I see no reason for it not to maintain that going forward. Will we start using other technology to complement what we do? Probably. Will we advance our technology from analog to digital? We're in the middle of that. But, I don't share the doomsayers' point of view, because history has proven them wrong each time.
Warfield: We're definitely competing with a lot of alternative entertainment sources that target the younger audience. When we were growing up, we got into a car and either talked to our parents or listened to the radio. Kids today get in the car, and they can listen to AM, they can listen to FM, they can listen to satellite. They can watch a movie in the back seat, or play their Gameboys or Sony PSPs, or listen to iPods. We're competing for their time. There are certain challenges related to that, but I think those challenges are related to content. We give people a reason to want to listen. You want to know about new music? Where better to go than to a radio station? Ultimately, if we do good radio, we will continue to be a vital medium used by the younger audience, and they will continue to grow up with us.

Despite the challenges we've discussed, how would you characterize the state of Urban radio today?
Urban radio is very vital and healthy. In many cases, it is the first source of information for our audiences. We're providing critical services to the community that aren't provided by any other broadcaster. We need to be supported, and we're up to the battle and the challenges that come with it. We love the formats that we represent, but the greatest charge I get is that we are connecting with, and servicing that Urban community. One reality of the Urban experience is that the listeners don't abandon the format. They grow with the format. Today, there are enough alternatives within that Urban arena to satisfy the musical tastes, but still keep them connected with what's going on in their cities.
Jones: Urban radio is the most dynamic force in pop culture today, and the future looks even more impressive. Urban radio is impacting all of pop culture in the U.S. and around the world. They need to pay attention to that, because that is a precursor to what their media-buying decisions will look like in the future. Today is a good time to sharpen their saws.

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