The Curse of the Big City Shadow

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The Curse of the Big City Shadow

New York City and Philadelphia?  Great radio buys.  Trenton, NJ?  The worst.

Radio stations from America’s Top 10 Radio markets typically dominate the listening landscape in fringe cities like Trenton, San Jose and Santa Barbara, located 30-60 miles from major market epicenters.  This inflates advertising costs in these outlier markets, where local demand enables stations to charge an obscene premium for their air time.

Take Trenton, for example, 35 miles northeast of Philadelphia and 60 miles south of Manhattan.  The average cost of reaching 1,000 Adults 25-54 (CPM) during the week on AM/FM radio averages over $150.  That’s off-the-charts crazy.  Compare that to Philadelphia, with a CPM just above $13.  Why the discrepancy?  Eight of the Top 10 rated radio stations in Trenton are Philadelphia radio stations.  So if you’re a Trenton-area business – and you don’t want to buy Philadelphia radio stations that will “waste” your message on 90% of the Philadelphia audience unlikely to do commerce in Trenton – you’re left with a handful of true Trenton stations, which charge supply-and-demand-driven rates to keep the message within the Trenton Metro.

In other words, you’ll pay the $150+ CPM for the privilege of staying local.  For comparison, radio market #149 Fredericksburg VA (behind Trenton’s #148), has a CPM around $30.

Similar situations exist in other markets around the country:

  • San Jose in the shadow of San Francisco
  • Santa Barbara, Oxnard-Ventura and Riverside-San Bernardino in the shadow of Los Angeles
  • Stamford in the shadow of New York City
  • Sarasota-Bradenton in the shadow of Tampa 

So, does it make sense to avoid radio in these shadow markets?  No.  But you might consider alternatives, like splitting the buy between AM/FM radio and Digital Radio to buy advertising impressions in a confined geography.

Streaming radio platforms like Pandora and Slacker enable you to buy radio time broken down by county or zip code clusters at a CPM well below its AM/FM counterparts in these markets.  Pure Play digital stations give you the added bonus of being able to serve display advertising and, in some cases, bundle in video pre-rolls and build tracking campaigns based on consumer browsing behavior.

Big picture?  There are 274 Nielsen-rated radio markets in America.  Over 170 of them deliver a targeted, Adults 25-54 CPM under $20.  The ten most-expensive markets – all of them over a $50 CPM – lie in the shadows of major markets.

The Radio Agency is a national subscriber to Nielsen audio, with access to ratings information in all 274 U.S. radio markets.  We can slice-and-dice the numbers in infinite ways to unearth your best buying strategies and tactics.  Contact us if we can help you plan and place your successful campaign.  Data drives success.

Mark Lipsky is the President and CEO of The Radio Agency. Please follow The Radio Agency’s Blog “Sounding Board” by subscribing to the email or RSS links above.Visit our website