February 22, 2013

The Drip Drip Drip of Audience Flow
By Richard Harker

Richard Harker

Say your station is very successful with some of the highest AQH numbers in your market. A year passes and youíve still got the same AQH.

You might feel pretty good about the station.

And youíd be tempted to keep doing what youíre doing. ďIf itís working, why change?Ē

But do steady ratings mean you have the same people still listening to the station one year later?

Probably not.

Even when Arbitron ratings are steady, your audience may be radically changing.

And you may not know whether you need to do anything differently because of the change.

Over time a radio station gains new listeners at the same time its loses other listeners who have stopped listening, Even if your cume and AQH are identical from one year to the last year, you canít assume the same people are listening.

Itís what we call audience flow.

Audience flow is the turnover with a stationís audience as new listeners replace ex-listeners.

Think of your audience as a bathtub with the faucet running and the drain open. If the faucet is running faster than the drain, the bathtub gradually fills. Your audience is growing.

But if the faucet is only a trickle and the drain is open, the bathtub will gradually empty. Your audience is declining.

If the bathtub is filling at the same rate that it is draining, the level in the tub will remain the same despite the fact that new water is replacing old water continually.

The size of your audience may appear steady, but it is steady because the number of listeners coming and going are the same, not because the same people are listening.

(In reality, things are a little more complicated. Generally, share erosion begins with a decline in TSL. Itís only if the problem continues that people abandon a station entirely.)

Why does audience flow matter?

Because radioís bathtub is rarely filling and emptying at the exact same rate.

Think about a nearly full bathtub with a dripping faucet and tiny leak. The level of the water will appear to be steady, but if the leak is even slightly greater than the drip, the tub will eventually empty.

Theoretically, you should be able to see these small audience leaks by carefully watching how the ratings change from month to month.

Thatís the theory, but in reality, you canít trust the numbers to detect the leaks in a timely manner.

The problem is that Arbitron, even PPM, is a lagging indicator. It tells you what has happened in the past not what is happening right now.

A second problem is that Arbitron ratings wobble.

Sometimes the numbers go up one month for no apparent reason, and then inexplicitly drop back down the next month.

Generally, the wobbles are small, maybe a few tenths of a share, but because the swings are continual and seemingly random, we tend to dismiss small changes in either direction.

We believe that next month the numbers will probably wobble in the other direction, and generally, weíre right.

But over time, the spikes and dips donít quite cancel each other out exactly.

The difference between your downward and upward swings might be as little as a few hundred listeners, but like small leaks small differences add up over time.

The combination of Arbitronís time lag and month to month wobbles can obscure real downward trends for so long that a radio station doesnít recognize that thereís a problem until it is too late to respond.

What should a station do?

The first step is to recognize audience churn as a continual process.

Make sure youíve adequately defined the stationís target listener by demographics, psychographics, and geography.

We like to think of our listeners as loyal and committed to the station, but the reality is that most listeners have low station fidelity.

They are not listening to your station out of a sense of loyalty, but instead for the very practical reason that right now it comes closer to filling their needs than the alternatives available to them.

Recognize that listener tastes change. What a person likes today may not be what she likes tomorrow.

Perceptual research and music testing along with insightful strategic interpretation can make sure the station continues to meet listener needs even as those needs change.

Recognize that your radio station is constantly changing, often inadvertently. Make it a practice to periodically question the programming and marketing direction of the station.

Every decision should be based on a timely market-based determination on whether the station continues to be relevant for listeners, and more importantly, a better choice than their other options.

Always respond to competitive changes in the market. Every competitive move subtly repositions all other stations. Even format changes and adjustments in different formats can impact your position in the market.

Most station failures are not because the station sounded bad. They failed because there was no unfulfilled need for the product in the market.

And finally, donít trust the ratings.

Yes, Arbitron is radioís ratings currency. Yes, the station spends a lot of money for the ratings, and your job security depends in good Arbitron ratings.

But ratings are a very imperfect and inexact estimate of what has happened in the past.

You canít create a successful station by reacting to ratings. Good ratings are a consequence of creating a good well-targeted product.

And you canít create a good well-targeted product by continually focusing on Arbitron as your metric. Itís like driving using only your rearview mirror.

Every radio station is a bathtub continuing filling and emptying at the same time. Follow these rules, and you can be sure that your bathtub will be overflowing with listeners.


Richard Harker is President of Harker Research, a company providing a wide range of research services to radio stations in North America and Europe. Twenty-years of research experience combined with Richard's 15 years as a programmer and general manager helps Harker Research provide practical actionable solutions to ratings problems. Visit www.harkerresearch or contact Richard at (919) 954-8300.


Nicki Farag,
SVP of Promotion,
Def Jam Recordings

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