This is the latest evidence that denial is not just a river in Egypt.
First a little background if you’re Not a regular reader or need a refresher. Up until a few years ago, the standard way of measuring the audience of a radio station was a paper diary. Each person in the household would mark on a page which radio station they were listening to during which hours. At the end of the rating period, the books would come in, clerks would do the followup on diaries that didn’t come back, do the math and out would spit the Arbitron ratings after a little massaging. Very expensive, very subjective and a long time between the rating period and when the numbers showed up.
A rating point means the 1% of the people in the listening area of the station are listening to the station. A Share Point means that 1% of the people who have a radio turned on are listening to your radio station. Share is meaningless – unless you know the size of the total audience during the time period being measured, share only told you the relative popularity of a station – advertisers pay for number of humans who heard their message.
A few years ago, the radio advertising Bureau which represents advertisers – started getting really pushy that they did not believe Arbitron’s numbers. In response, Arbitron developed the personal people meter (PPM) – a small device about the size of a pager which people carry around. It picks up coded messages in the radio signals and records constantly what radio stations the person can hear – probably important that just because a person can hear a radio station does not mean they are listening to it.
Arbitron tried to prepare people for the idea that PPM was going to show low ratings for some vague abstract reasoning – the real reason was – people LIED to the diaries. Instead of recording actual listening, people viewed Arbitron as “voting” for their favorite radio station and would claim to listen to it from the moment they woke up till the moment they went to sleep.
So what PPM has found is that much fewer people are listening to radio than people believed in the past. It’s the only thing you know is share, you don’t know that the size of the entire pie has been shrinking.
Let’s create a very simplistic example. Let’s make a city that has a population six years and older of 1 million people. During rush hour, 250,000 people are listening to the radio and your station has 2500 listeners you have a 1.0% share, and a 0.25 rating.
Now let’s say rush-hour is over, and a total of 10,000 people are listening to the radio, and 2000 of those are listening to your station. You have a 20% share and a 0.20% rating.
Keeping the math simple, let’s say those are the two periods be measured and they’re of equal length – what is your average share for the day? Is it just the average of two ratings (1%+20% / 2 = 10.5%) or is the weighted share (2500+2000) / (250,000+10,000) = 1.73%
Taking it one step further, just because of the station has an average rating or share for the day, or for a part of the day – does not mean that when your ad runs that that number of people are hearing the ad, and even harder to measure – are they listening to your ad? If you buy an ad during the 6-9 AM day part, an ad at 6:07 is worthless, an ad at 7:45 is the big time.
Well Arbitron no longer exists. Nielsen, the people who do TV ratings, bought Arbitron. It’s pretty clear to me based on wild fluctuations and a number of publicly reported major discrepancies that Arbitron had serious quality problems – Nelson basically just said that the Los Angeles ratings are so messed up that they refuse to publish corrected ratings even though they know that they’re wrong. In one case the list was actually in Mexico but their ppm device was left with a relative in Los Angeles. In another case, people who work for the radio stations were carrying around the meter And claiming to have a large number of people in the house – which everyone in the radio business knows you can’t do if you work in the business.
So where does Radio go from here? Create a new hypothesis called PPM rating compression and blames the messenger – and commission a study that 93% of people hear a radio sometime during the Month