The Impact of Combining Local Radio and TV on Advertising

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1 ARBITRON WHITE PAPER The Impact of Combining Local Radio and TV on Advertising A Collaboration between Arbitron Inc., Entravision Communications and Franco Research

2 The Impact of Combining Local Radio and TV on Advertising 2 Contents Background... 3 Problem Statements... 3 Methodology... 3 Current Options... 4 PPM Cross-Platform Study Objectives... 4 Findings... 4 EVC TV Dominates Access and Primetime, EVC Radio Dominates Daytime... 5 EVC Radio and TV Follow Users Throughout Their Day... 6 Radio and TV Both Deliver Significant Reach... 7 When Adding Radio to TV, Reach Increases Dramatically by Daypart... 8 Frequency Differs Dramatically by Time of Day and Medium... 9 Reach Can Be Increased by Using Both Radio and TV EVC Radio Plus TV Reaches 56% of the Entire Market McDonald s Radio Plus TV Schedule Increases Reach, Frequency and GRPs Characteristics of TV/Radio Users Conclusions Next Steps Limitations and Considerations About Arbitron PPM ratings are based on audience estimates and are the opinion of Arbitron and should not be relied on for precise accuracy or precise representativeness of a demographic or radio market.

3 The Impact of Combining Local Radio and TV on Advertising 3 Background Arbitron partnered with Entravision Communications (EVC) in the Denver DMA/MSA to conduct a pilot test to explore the impact of jointly selling advertising on its local TV and radio stations. EVC is the largest owner of Univision and Telefutura affiliates in the U.S. and owns and operates both TV and radio outlets in the Denver market. Its Denver properties are: Univision, Channel 50 Telefutura, Channel 14 KXPK-FM KJMN-FM KMXA-AM Arbitron used its single-source Portable People Meter (PPM ) panel of 1,274-installed persons, aged 6+ in the market. Of the panelists, 294 were Hispanic, aged 6+. For the first time, Entravision received credit in these reports for the viewing that took place away from the home TV set. Problem Statements 1. Although advertisers have expressed the need for cross-platform measurement, there is currently no single-source measurement. As a result, advertisers cannot quantify the combined impact of TV and radio on their advertising campaign delivery. 2. Advertisers cannot evaluate the best TV and radio or daypart mixes to reach target audiences. Methodology The study is based on the Denver Metro geography. Pilot ran from July 1, 2010 to September 15, The findings in this report are based on the Arbitron September survey period of August 19, 2010 to September 15, Entravision TV and radio properties in Denver were encoded for the PPM system. Conducted using the same PPM panelists who were In-Tab for the Arbitron-syndicated PPM survey. TV universe was limited to the Entravision stations; thus, there were no share estimates for TV. Population estimates used for language weighting were provided by Geoscape. All TV and radio estimates were live plus same day.

4 The Impact of Combining Local Radio and TV on Advertising 4 Current Options Currently, advertisers and agencies must rely on fused data sets to model advertiser effectiveness in a cross-platform environment across both TV and radio. Models do not contain true cross-media duplication and cannot give an advertiser the ability to leverage its investment effectively and evaluate its return on investment. PPM Cross-Platform Study Objectives The objective of the Entravision and Arbitron pilot was to answer two key questions: 1. What is the combined impact of Entravision TV and radio on advertising campaign delivery? 2. What is the payoff for advertisers who use both Entravision media in their media mix versus one or the other? Findings The usage patterns of TV and radio complement each other, with radio delivering high daytime ratings and TV delivering at night. Seventy to eighty percent of the combined TV/radio audience from 6AM- 4PM can be found on radio and 80% of the audience from primetime to midnight is found on TV. Radio and TV are both reach mediums, with radio s highest reach in afternoon drive (38%) and television reaching 45% of all Hispanic persons weekly in primetime. Adding radio to TV delivers near-primetime levels throughout the day Each media type reaches a heavy user that is a distinct consumer segment that the other cannot effectively deliver Campaigns can emphasize reach or frequency in a TV and radio buy, depending on the combination of dayparts used. Not all dayparts on TV and radio share the same percentage of audience.

5 The Impact of Combining Local Radio and TV on Advertising 5 EVC TV Dominates Access and Primetime, EVC Radio Dominates Daytime Hispanic A18-49 AQH Ratings TV Stations: KCED/UNV and KTFD/TF Radio stations: KJMN/Jose-FM and KXPK/LA Tricolor-FM UNV-TV TF-TV Jose-FM La Tricolor- FM am 7-8am 8-9am 9-10am 10-11am 11-12pm 12-1pm 1-2pm 2-3pm 3-4pm 4-5pm 5-6pm 6-7pm 7-8pm 8-9pm 9-10pm 10-11pm am Source: Arbitron PPM Cross-Platform Custom Report, August 19, September 15, 2010, Hispanic Adults 18-49, Mon-Sun 6AM-6AM This is the first time that both TV and radio audiences have been captured by a single electronic panel. Reflected are patterns throughout the day that are logical and consistent with expectations. It is also clear that among these properties, the usage of TV and radio complement each other. Telefutura has the strongest Spanish-viewing levels during the day. Univision leads in primetime. Jose is the top Spanish station in midday. Tricolor leads in morning drive. The combined radio levels from the two radio stations are two to three times the Univision TV daytime levels.

6 The Impact of Combining Local Radio and TV on Advertising 6 EVC Radio and TV Follow Users Throughout Their Day Radio vs. TV Share of EVC Hispanic A18-49 Impressions 100% 90% 80% EVC Radio EVC TV 70% 60% 50% 40% 30% 20% 10% 0% 6-7am 7-8am 8-9am 9-10am 10-11am 11-12pm 12-1pm 1-2pm 2-3pm 3-4pm 4-5pm 5-6pm 6-7pm 7-8pm 8-9pm 9-10pm 10-11pm am Source: Arbitron PPM Cross-Platform Custom Report, August 19, September 15, 2010, Hispanic Adults 18-49, Mon-Sun 6AM-6AM This is another look at the complementary relationship between the Entravision-owned TV and radio stations for advertisers. 70 to 80% of the audience can be found on radio from 6AM-4PM 80% of the audience is found on TV from primetime to midnight. A radio/tv campaign offers the opportunity to reach an audience when the other medium s usage is lower.

7 The Impact of Combining Local Radio and TV on Advertising 7 Radio and TV Both Deliver Significant Reach EVC Cumes by Daypart Percent of Hispanic A18-49 Morning Drive 50,800 96, EVC Television EVC Radio Daytime/Midday 90, , Afternoon Drive/EF 62, , Evening/Prime 136,100 87, Weekend 72, , TV: Morning M-F 6a-10a, Daytime M-F 10a-5p, Early Fringe M-F 5p-6p, Prime Time M-F 6p-10p, Weekend PM Sa-Su 1p-7p Radio: Morning M-F 6a-10a, Midday M-F 10a-3p, PM Drive M-F 3p-7p, Evening M-F 7p-12m, Weekend Sa-Su 10a-7p. Source: Arbitron PPM Cross-Platform Custom Report, August 19, September 15, 2010, Hispanic Adults 6+, Mon-Sun 6AM-6AM There is a long-held belief that radio is the frequency medium and TV is the reach medium. Instead, this study revealed that the high rating found on radio is coming not just from loyal audiences, but by an average quarter-hour, driven by sizeable cumulative audiences (or simply, a large number of individual people). In summary, each medium is capable of strong reach, and a TV-plus-radio campaign attains reach levels that may have been discounted in the past.

8 The Impact of Combining Local Radio and TV on Advertising 8 When Adding Radio to TV, Reach Increases Dramatically by Daypart Added La Tricolor Reach When Combined With UNV-TV by Daypart Percent Hispanic P Morning M-F 6a-10a Morning M-F 10a-5p Early Fringe M-F 5p-6p Prime Time M-F 6p-10p Weekend PM Sa-Su 1p-7p UNV-TV Reach La Tricolor M-F 6a-10A La Tricolor M-F 10a-3p La Tricolor M-F 3p-7p La Tricolor M-F 7p-12m La Tricolor Sa-Su 10a-7p How to Read: Add another 20.1 Hispanic P18-49 reach points to Univision TVs M-F 5P-6P reach, when including La Tricolor M-F 3P-7P Source: Arbitron PPM Cross-Platform Custom Report, August 19, September 15, 2010 Advertisers buying both media are receiving near-primetime reach all day long. This chart replicates an advertiser with presence on Univision in Denver in each daypart. By buying the radio station, Tricolor, with a schedule airing from 3PM-7PM, this advertiser is achieving primetime reach nearly everywhere.

9 The Impact of Combining Local Radio and TV on Advertising 9 Frequency Differs Dramatically by Time of Day and Medium EVC TV and Radio Average Weekly Frequency by Daypart Hispanic P18-49 Morning Midday EF/PM Drive Prime Weekend UNV-TV Telefutura-TV Jose-FM La Tricolor-FM Radio: Morning M-F 6a-10a, Midday M-F 10a-3p, PM Drive M-F 3p-7p, Evening M-F 7p-12m, Weekend Sa-Su 10a-7p TV: Morning M-F 6a-10a, Daytime M-F 10a-5p, Early Fringe M-F 5p-6p, Prime Time M-F 6p-10p, Weekend PM Sa-Su 1p-7 Source: Arbitron PPM Cross-Platform Custom Report, August 19, September 15, 2010 Complementing this broad reach is the frequency attainable within specific dayparts. Advertisers should consider different daypart and station combinations to achieve their goals. Jose-FM added to TV primetime would deliver maximum frequency. Other combinations might be sought to extend reach. Important to remember: some dayparts are different lengths when looking at TV vs. radio, so there will be some differences in average weekly frequency. Calculations: AQH Impressions x Number of Quarter-Hours Per Daypart, Per Month Total Daypart Cume Number of Weeks = EVC TV and Radio Average Weekly Frequency by Daypart

10 The Impact of Combining Local Radio and TV on Advertising 10 Reach Can Be Increased by Using Both Radio and TV Radio and TV Cume This gives the cross-platform use of radio and TV the capability of increasing advertiser s reach. Radio Audience Television Audience Radio Exclusive 12% TV Exclusive 22% Also Watches TV 88% Also Listens to Radio 78% Source: Arbitron PPM Cross-Platform Custom Report, August 19, September 15, 2010, Hispanic Adults 18-49, Mon-Sun 6AM-6AM While daypart mix matters, this chart demonstrates that for advertisers buying full schedules on a single medium, there is still reach to be gained by adding the other medium. An important portion of each audience is only reachable by using both media in combination. Even with two complementary media targeting the same Spanish-dominant consumer, there is a portion that remains exclusive. This proportion of exclusive audience would presumably be even larger among a more diverse mix of radio formats and TV programs.

11 The Impact of Combining Local Radio and TV on Advertising 11 EVC Radio Plus TV Reaches 56% of the Entire Hispanic Market EVC TV + Radio Hispanic P18-49 Cume 60.0% 55.9% 55.9% 50.0% Added Radio Reach 5.3% Added TV Reach 11.2% Cross-Platform Cume 40.0% 30.0% 20.0% TV Reach 50.6% Radio Reach 44.7% 10.0% 0.0% EVC TV & Radio EVC Radio + TV Source: Arbitron PPM Cross-Platform Custom Report, August 19, September 15, 2010, Hispanic Adults 18-49, Mon-Sun 6AM-6AM Combined, EVC TV and radio properties reach over half of all Denver Hispanic persons weekly.

12 The Impact of Combining Local Radio and TV on Advertising 12 McDonald s Radio Plus TV Schedule Increases Reach, Frequency and GRPs McDonald s Schedule Results TV, Radio and TV + Radio Schedule Delivery Hispanic A18-49 Radio TV Radio + TV # Spots Cost $17,940 $36,451 $54,391 Reach (%) AQH Rtg Avg. Freq GRPs CPM $19.1 $24.3 $22.3 Source: Arbitron PPM Cross-Platform Custom Report, August 19, September 15, 2010 Posting an actual McDonald s schedule that aired on Denver EVC properties in August and September 2010 showed that radio was delivering an impressive reach at half of the TV investment. However, even with these heavy base schedules, by adding the other medium McDonald s receives: 60 to 100% greater frequency. 10 to 23% greater reach. At least 60% more GRPs. Cross-platform CPM s 8% lower than the TV schedule alone In addition, by using both radio and TV, the advertiser is getting more consistent near-primetime reach throughout the day and reaching the elusive light consumer of the other medium.

13 The Impact of Combining Local Radio and TV on Advertising 13 Characteristics of TV/Radio Users TV Audience Heavy TV Viewers/ Light Radio Listeners Youngest Segment Median Age of 29 77% Female Skews Middle Income Most Likely to Have Children Most Bilingual Radio Audience Heavy TV Viewers/ Heavy Radio Listeners Skews slightly younger Median Age % Female 62% <$25K HH Income 95% Spanish Dominant Light TV Viewers/ Light Radio Listeners 52% Male Skews Middle Income Most Likely to Not Have Children Most English Dominant Light TV Viewers/ Heavy Radio Listeners Oldest skewing segment Median Age % Male 25% $50K+ HH Income Most Likely to be Employed 91% Spanish Dominant Heavy TV viewers/light radio listeners are the youngest age segment while heavy radio/light TV viewers skew oldest. Heavy users of TV and radio consume approximately two hours of each medium daily. Light users watch/listen about five minutes daily to each medium. Not surprisingly, heavy users of Spanish-language radio and TV are Spanish-dominant and light users skew English-dominant.

14 The Impact of Combining Local Radio and TV on Advertising 14 Conclusions Radio together with TV can bring advertisers primetime-audience levels throughout the entire day. Using both TV and radio in an advertising campaign is extremely effective in increasing both reach and frequency. Reach goes up because each medium has a unique audience and frequency build due to increased spots and duplication. Light users of one medium can be heavy users of another, and vice versa, thus extending reach to a new audience one that may be qualitatively different than the audience targeted with a single medium. Radio plus TV can increase reach dramatically, while improving cost CPM. Next Steps 1. Perform longitudinal analysis of data to study the impact of seasonality. 2. Repeat study in secondary market: More Spanish outlets Larger Hispanic population 3. Repeat study with general market media company. Limitations and Considerations The results in this white paper are based on data from the Arbitron four-week September survey period: August 19, 2010 to September 15, Study results are unique to Entravision Spanish-language media properties in the Denver Metro. All Entravision TV and radio properties in Denver were encoded for the PPM system. No other TV stations were PPM-encoded. Denver has relatively few full-power Spanish radio stations. In other markets, audiences may disperse to a wider array of Spanish radio stations. Seasonality could change audience levels and the cross-over between media. Trending data would lead to greater insights.

15 The Impact of Combining Local Radio and TV on Advertising 15 About Arbitron Inc. Arbitron Inc. (NYSE: ARB) is a media and marketing research firm serving the media radio, television, cable, online radio and out-of-home as well as advertisers and advertising agencies. Arbitron s core businesses are measuring network and local market radio audiences across the United States; surveying the retail, media and product usage patterns of local market consumers; and providing application software used for analyzing media audience and marketing information data. The company has developed the Portable People Meter, a new technology for media and marketing research.

16 Headquarters (410) Atlanta, Chicago, Dallas, Los Angeles (888) New York (212) (888) Portable People Meter, PPM and PPM 360 TM are marks of Arbitron Inc. AAS /11

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