Wednesday, February 23, 2005

One Minute On PPM

One of the exciting aspects of Arbitron's Portable People Meter (PPM) technology is its capacity, given sufficient sample, to analyze minute-by-minute listening. These analyses will be useful in studying audience behavior during breaking news, special coverage, high profile interviews and features, local inserts during network programs, and even pledge drives.

But the adage, "you become what you measure," will also have more meaning. Too much focus on minute-by-minute analysis will lead to minute-by-minute programming tactics. That would not serve public radio well.

PPM presents another new opportunity that has the potential to serve public radio even better than either today's diary-based measurements or tomorrow's minute-by-minute analyses. PPM will allow us to measure audiences and their behaviors over months, even up to a year.

This longer view will help us better understand and manage the ongoing relationship between a public radio station and its listeners. We know the Cume, the total number of people who listen to public radio, will be much larger. Over a year, it could be twice as large as the weekly Cume. (Only 1 in 20 gives? Yikes!) We'll be able to analyze how people who enter the audience as new listeners develop regular listening habits. Listeners who appear to be Fringe listeners over the course of a week might very well be Core listeners over the course of a month or two.

Understanding these long-term dynamics will help us develop programming, promotion, and fundraising strategies that keep listeners and contributors for years rather than minutes.

It's an opportunity we should eagerly embrace.

Monday, February 21, 2005

Metrics That Matter

Public radio loves its metrics. We've got more numbers than we know what to do with and they are frequently in contradiction with one another. So how does one go about deciding which numbers matter? It’s simple. Develop a strategy.

Metrics without strategy are meaningless. You first have to decide a direction and then figure out how you’re going to get there. That requires two types of metrics – “Ends” and “Means.”

"Ends" metrics are the most important. They represent real, annual goals like hours of listening or net revenue. It is what you strive for. They are goals that are completely under your control. They aren't percentages such as audience shares or ratings, which can change for reasons outside of your control.

"Ends" metrics answer questions such as, "Are we providing more service than last year?" and "Are we more self-sufficient than last year?" One could, in fact, stop the list of metrics that matter right there -- providing more service and being more capable of sustaining that service without subsidies. But that’s another discussion.

All the other statistics we use in public radio are means towards those ends. These "Means" metrics include Loyalty, Time Spent Listening, Donor Retention Rate, Pledge Drive Revenue, and others. They are important metrics that can help a station meet its end goals. But alone, they do not measure success.

Then there are numbers such as Share, Audience Composition, and Average Pledge Drive Gift. These are about the worst numbers public radio can use as measures of success.

The problem with Share is that half of the equation—the Persons Using Radio half—is outside of the station’s control. That makes it a poor choice for goal-setting. For example, a station can maintain Share while losing audience. That happens when overall radio listening drops. Maintaining Share in that situation is akin to going down with a sinking ship. Not exactly a success story. The opposite happens as well. Stations get more listening, but listening in the market overall is up. Share stays the same, or drops. So even though more listening occured, the station looks less successful.

The problem with Audience Composition was addressed in the “Cosmetrics” posting a while back. To summarize, it’s at the bottom of the barrel in terms of audience success metrics. That’s because percentages can change for the wrong reasons. Average Pledge Drive Gift has the same weakness. It can go up by driving away potential contributors. It can be forced higher by raising less money through the mail.

So if you want to start making sense of all of the numbers that are being thrown your way, pick two or three measurable goals that represent true improvement for your fiscal year. Then the find one or two critical numbers that help explain what it takes to meet those goals. Pretty soon, it’ll all start to make sense.

Thursday, February 10, 2005

Reaching New Audiences

On February 1, the Corporation for Public Broadcasting (CPB) board adopted a resolution directing CPB management to “…encourage public radio stations to use this [digital] technology to provide services that are responsive to the needs of underserved minority audiences, including those with second language needs, in the communities in which these audiences are most represented…”

It was previously pointed out in this blog that public radio’s efforts to reach minority audiences have been woefully underfunded to date. At a minimum, reaching and keeping new listeners will cost public radio the same amount of money it costs to reach and keep today’s listeners.

There are many ways to do the math, but JSA estimates that getting one million new listeners to tune-in for 7 hours per week will cost at least 20 to 25 million dollars per year. That includes station costs, network costs, and producer costs. And it assumes these new listeners can be acquired and maintained as efficiently as public radio serves it’s existing audience. Put another way, the JSA estimate assumes public radio will take full advantage of lessons learned over the past few decades.

Of course, public radio won’t grow new audiences from zero to one million listeners overnight. And once the audience is gained, it must be maintained. That raises questions of self-sufficient operations versus on-going subsidies. That being the case, CPB would be wise to explore the full costs of reaching new listeners over a minimum of a 10-year horizon. The price tag will be in the hundreds of millions of dollars and the exercise could have significant influence on how CPB money, including Community Service Grants, are allocated in the future.

Tuesday, February 01, 2005

High Standards

A few years ago, the Better Business Bureau’s Wise Giving Alliance published Standards for Charity Accountability. It’s a good resource for public radio stations. There are three points worth mentioning here.

First, the BBB suggests, “An organization should regularly assess its effectiveness in achieving its mission [and that]… an organization has defined, measurable goals and objectives in place and a defined process in place to evaluate the success and impact of its program(s) in fulfilling the goals and objectives of the organization." While there are many measurements available to public radio stations to accomplish this, John Sutton and Associates recommends starting with Annual Listener-Hours, which demonstrates how much of your mission/programming was consumed during the year. Increase overall listening and you''ve increased your public service.

Second, the BBB suggests, “An organization spend at least 65% of its total expenses on program activities.” This is simple to check. Just look at your programming budget relative to your total budget. Add in your web expenses if you provide public service content on the web.

Third, the BBB suggests, “An organization spend no more than 35% of related contributions on fund raising.” That’s 35 cents to raise a dollar. The most recent revenue report from the Station Resource Group showed that public radio spent 36 cents to raise a dollar in fiscal year 2003. So as an industry we have some work to do, especially since we have on-air pledge drives to help keep our out-of-pocket fundraising costs low.