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Marketing Matters: Hold the Eulogies

By: Donna C. Barson, MBA
Posted: December 5, 2006, from the December 2006 issue of GCI Magazine.

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This observation comes from the recent report that Howard Stern’s advertising rates on Sirius Satellite Radio are between $5,000 and $6,000. Live reads, which is when on-air talent promotes the product, are going for $10,000. Sirius was quoting about $20,000 for a live read before Stern’s show first aired. Compare this to Stern’s former live read cost of $30,000 on traditional radio.

How big is Stern’s actual audience? It’s impossible to draw an exact comparison with his former show because Sirius does not report advertising data per show, as traditional radio does via Arbitron. Nevertheless, it is estimated that Sirius has about 4.7 million subscribers. On his old show, Stern was averaging about 7 million listeners.

But in the absence of hard data, it seems almost certain to conclude from these ad numbers that Stern’s audience is not the gigantic, all-encompassing beast that it was imagined and that satellite radio has not wiped traditional radio off the map. The reports of traditional radio’s death were a tad premature.

The surprising recent report by Arbitron further bolsters this view, finding that, despite the common perception, radio commercials do not cause listeners to change the station. The study found, on average, that radio commercials retain a staggering 92% of their lead-in audience.

The study broke down retention levels according to time of day and length of commercials played, but the real message here is the obvious—traditional, commercial radio is alive and kicking. With such new concepts in development as blinks (one-second commercial shots), traditional radio seems to be ignoring all the “experts” who said it was dead.

All You Zombies