Sponsor (Jan-June 1955)

research executive: "One reason you can't pin down the relationship between audience and rates is that there is no agreement on which rating service is correct. You'd have to have all the broadcasters and all the aiKertisers agree on one standard rating service and I don't have to tell \ou tliat it'll be a cold da) in July when that happens." Some of the authorities made the point that there is also disagreement in defining the broad area of a station's circulation, let alone audience. The disagreements I 1 I start with engineering estimates of how far out the station's Munal goes. (2) continue with disagreements on how strong the signal should be in a given area or home to be considered adequate reception and (3) end up with disagreements of the degree to which one station's signal overlaps another's. The disagreements on overlap are particularly applicable in setting up network rates (since advertisers don't want to be charged twice for the same home) but also affect spot rates. Another factor in the relationship between rates and circulation or rates and delivered audience is the size of the market. It is commonly understood that costs-per1.000 in a large market are usually less than in a small market. This is shown clearly in the Dorrell chart. Taking costs-per-1.000 potential circulation from the line drawn through the dots, here's what shows up ( these are not actual station rates, but rough theoretical "averages") : For 200,000 circulation, a 20-second announcement i ost about $100 or 50c-per1,000. For 500,000 circulation, the figure is about 35c. For 2.000,000, the cost is less than 22c. The extent to which demand and supply affects spot rates is hard to pin down since there are no universallyaccepted standards for station rates and. hence, no way of saying flatly that a station's rates are way out of line. But agency as well as station people left no doubt that there are plenty of occasions where rates are hiked because of the long lines of aiKertisers seeking availabilities. The tone of reactions was not the same in all cases, however. Said an important media man at one of the top air agencies: "One of the nation's big stations recent Iv raided its spot rates although there was no evidence that circulation or viewers were appreciabb up. The station just figured that it so mam advertisers were trv ing to get on, the station must have something extra. At least, that's what the) said and who can say they're wrong?" A network executive had this to -a\ about the economics of supply and demand : "I don't think that stations ask themselves: 'What will the traffic bear?,' and then set their rates accordingly. \et, in the last analysis, all prices in a free economy are determined bv what the traffic will bear. Stations have to compete with other stations and tv has to compete with other media. If their prices are too high, why advertisers will stop buying and prices will come down. If advertisers keep on buving, why, then they must be getting their money's worth." Said an agency research executive: "I think some of the stations are getting out of line in jacking up their rates. There's no justification for some of the new spot rates. The audiences don't justify the increases." To some on the advertiser's side of the fence, the lack of a standard in determining rates is inevitable and. possibly, desirable. Here's how one respected timebuyer, a veteran of two decades in the business, put it: "There was never any standard in radio and there won't be one in tv. Not even if the NARTB ever gets its tv set count going on a regular basis. Circulation and program audience are important, but they are not the onlj factors in determining rates. Take two television stations in markets that are comparable except for the fact that the per capita buv ing power in one market is much higher than another. ^ oil shouldn't expect the station in the richer market to charge the same rate as the station in the poorer market. Equal-sized markets differ in other ways, too. Sometimes a market imuch more important than its population indicates because it is an important wholesale or distributing center. "Then there's that indefinable thincalled station character or personalis. You can't always define it exactly in terms of dollars but it's there and it's worth monev ." One reason for complaints about rates — the lack of station competition in important markets — is gradualb disappearing. Not only are the big single-station markets going out but the rapid growth in post-freeze video outlets i> iin i overlapping and, hence, competition. I here are expectations thai some stat ions network i ma\ drop in L955. These decreases inav average onl) $2 i to ! »0 per station but when thai s multiplied b lew dozen stations and then multipl bv ~>2 weeks, the saving add up. And ii is possible thai spot rates ma\ be .,11. < ted as well. • • • RADIO-TV NETWORK (Continued from page 39) common. Admiral i which sponsors Hi -hop Sheen on DTN), Coca-Cola i which sponsors Eddie Fisher on NBC I \ i and Chesterfield (which sponsors Perry Como on CBS TV) all have the taped versions of their tv shows on Mutual. Firestone Hour and Breakfast Club are simulcast on ABC as is Godfrey on CBS. Mutual gives this example of itnon-tv coverage: The net has a total of 2,487,000 (average) radio listeners to its Queen for a Day (sponsored on both am and tv by Old Gold cigarettes) . Of the radio listeners, 69.2% (1,721. "Spec ialized Programming REACHES, SELLS Los IWles ■» WarKct "ON* **t\ Mexican 10,000 WATTS Transmitter: Los Angeles, California Executive Offices: Santa Monica, California National Representatives: Forjoe & Co. New York, Chicago, Dallas, San Francisco Dora-Clayton Atlanta, Georgia GEORGE A. BARON, Gtn'l Mgr. 11; 10 JANUARY 1955 107