Opening Up the Conversation - talk radio new formats to attract new audiences - Statistical Data Included

American Demographics, Oct 1, 2001

Has the heyday of talk radio come and gone? Clinton's ratings-friendly scandals have died down, Howard Stern's marriage collapsed, Rush Limbaugh seems to have lost his buzz along with his weight and Dr. Laura Schlessinger was swiftly booed off TV. On the surface, it seems the radio babblers have been unceremoniously shushed.

Not so fast. Talk radio is still tremendously popular, capturing 17 percent of all listeners during a given quarter-hour period, a share that has remained stable over the past few years. Radio talk show hosts wield enormous influence. Witness the success of former radio stars on television: Larry King, Sean Hannity and Alan Colmes all rose through the ranks of radio. Limbaugh and Schlessinger still host the No. 1 and No. 2 radio shows in America. And five days into office, Vice President Dick Cheney awarded his first radio interview to Oliver North, syndicated host on Common Sense Radio.

But talk radio today goes beyond conservative political bluster. The format is veering in multiple directions - trying to target younger audiences, Hispanics and women - with variations like "hot talk," infotalk, sports talk, consumer and personal finance talk, and all-Spanish news. "The biggest trend taking place in talk radio is similar to what music radio went through during the '70s and '80s," explains Michael Harrison, editor and publisher of Talkers magazine. "We're seeing a broadening and expansion of talk into a number of niches - in terms of format, subject matter and demographic targets."

Advertisers have long underestimated radio's reach. The RAB Media Facts Book reports that consumers currently spend 85 percent of their time with ear-oriented media like radio and television, compared with 15 percent on print formats. Yet advertisers spend 55 percent of their dollars on eye-media, such as newspapers and magazines, and only 45 percent on ear-media. Talk radio is a particularly strong form of ear-media because it requires a high level of involvement from the listener. Unlike music, which tends to fade into the background, talk radio demands a listener's full attention. Furthermore, most programs rely on a high degree of interactivity through guests and listener call-ins. If a program's topic doesn't prove immediately popular with call-in listeners, the subject is changed, placing listeners in charge of content.

Talk radio seems to fit right in with our changing society - mobile, impatient and self-obsessed. Talk is most popular during weekday mornings, with the highest average quarter-hour rating (AQR) share of any format during the 6 a.m. and 10 a.m. commute - also the time slot with the largest radio audience overall. The rise of cell phones has aided talk's popularity during the morning drive time, allowing listeners to call in from their traffic-stalled vehicles. Radio listeners also tend to be loyal, tuning in to two or three different stations, but generally remaining true to one favorite.

Recent ratings back up the fact that listeners have their ears cocked. According to Interep, a New York City-based radio advertising and sales company, nine of the top 10 metro areas currently feature a talk format among their top 10 ranked stations. Arbitron, an international media research firm that measures radio audiences, shows the AQR for the news/talk/information category was up to 16.9 in the fall of 2000, from 16.4 in the fall of 1998 and a low of 15.6 in spring 2000. With nearly 17 percent of radio listeners in any given quarter-hour period tuning in to talk, it's the most popular radio format on the air. Moreover, all-talk formats have been steadily increasing, from an AQR of 1.6 in 1998 to an AQR of 2.2 in 2000. In 1983, only 53 radio stations had talk/news formats. (There were also fewer radio stations back then - 8,748 total in 1980 - but the proportion of talk formats was, nonetheless, miniscule.) Today, 1,724 of the 13,307 radio stations in America - or 13 percent - are devoted to news/talk/information.

Talk radio is not only one of the earliest examples of media providing connectivity, it's also one of the most effective. Advertisements are often integrated into the programming, with products hawked by its popular hosts, who create a "just between you and me" kind of pitch. The result is a highly successful illustration of one-to-one marketing.

Talk programs also tend to be more expensive for advertisers than music formats. One measure used to track radio revenue by format is the "power ratio," which compares share of audience to share of revenue. Historically, talk has had a power ratio of about 1.4, which means there's a 40 percent premium for talk radio above and beyond its strict audience share, according to George Nadel Rivin, partner in charge of broadcast services at North Hollywood, Calif.-based Miller, Kaplan, Arase & Co., a certified public accounting firm specializing in radio. "Talk has consistently been among the top three formats in terms of converting audience share to revenue share," explains Nadel Rivin.