Power Ratios

[Dan Strassberg]

I'm not talking here about the quantitiies that are usually expressed in
dBs; I'm talking about ad-agency fol-de-rol that I gather is driving the
radio business and quite possibly demonstrating the stupidity of station and
group management, agencies, and advertisers. If I've got it right, Power
Ratio is the ratio of a station's share of market revenue to share of
audience. If a station has 10% of the audience but takes in 15% of ad
revenues, its power ratio is 1.5 and that's excellent. OTOH, if a station
with a 10% audience share takes in 5% of the market's revenue, its power
ratio is 0.5, which is not good.

Guess what? Stations whose formats are unpopular with ad agencies have low
power ratios. Well, DUH! If a format is unpopular with agencies, they will
put their dollars elsewhere--on stations whose formats they like. So power
ratio appears to be a self-fulfilling prophecy that agencies can use to make
the rich even richer and the poor poorer. That the broadcasting and
advertising communities should accept this really dumb concept and use it as
a basis for promoting stations and making media buys can be a testament to
nothing other than the stupidity of those who compile and use this bogus
statistic.

Somebody tell me that I've got this wrong--and explain to me why I'm wrong
and why power ratios are really valuable metrics in making media buys.

--
Dan Strassberg, dan.strassberg@att.net
eFax 707-215-6367