A Daypart Is A Terrible Thing To Waste

One essential finding from JSA’s review of Spring 2005 audience data is that many stations, including top-performers, still have weak blocks of weekday programming.

As always, many stations have audience growth opportunities in middays. The big surprise was station performance after 7pm, where more than half of the stations we studied are tanking, to use the technical term.

Traditional thinking is that there is so little listening after 7pm, it doesn’t matter what programming goes there. That thinking is wrong.

Five hours of weak programming per weekday translates to 1,300 hours of lost opportunity per year. That’s 1,300 hours during which current listeners find the station not meeting their expectations. That’s 1,300 hours during which first-time listeners make a value judgment about the entire radio station.

There’s not going to be one single fix for evenings. Programming economics suggests that the financial costs cannot be on par with midday or drive time investments. But something needs to be done. In today’s highly competitive environment, public radio cannot afford to waste thousands, or even hundreds, of hours of precious airtime on programming that delivers substandard results.

Mixed News: Audience and Revenues

The Station Resource Group (SRG) just posted its analysis of public radio's annual revenue performance and the news is mixed. Because the SRG is working with audited financial data from CPB, the report covers revenues through FY 2004.

The good news is that overall net revenue, controlled for inflation, increased 2.1% despite the audience flattening out in FY 2004. The bottom line: public radio increased its spending power.

All of the growth was in underwriting and grant revenue. Net revenue from listener support dropped $1.6 million due to increased fundraising costs. Public radio's spending power from listener contributions decreased from FY03 to FY04.

Public radio spent 37-cents to raise a listener dollar in FY 04, including gifts from major donors. That's up from 36-cents in FY 03.

This is cause for some concern. The Better Business Bureau recommends that non-profits limit fundraising expense to 35%, or 35 cents on the dollar. Public radio is moving in the wrong direction on this benchmark.

This might be a temporary increase as stations invest in fundraising infrastructure, including major giving initiatives. But given the new CPB Community Service Grant criteria encourage further investment in major giving, the cost of raising a dollar is likely to go up for another few years.

There's one other reason public radio should be concerned about the rising cost of raising listener dollars. Public radio stations do not accurately track and report the true cost of on-air fund drives. CPB makes no attempt to collect this information. So the actual cost of raising a listener dollar is probably more than reported in the SRG analysis.

Conventional wisdom suggests that public radio's fundraising costs should be lower than the typical non-profit because it can use on-air fundraising to reach its potential giver base. The costs of acquiring, retaining, and upgrading a contributor should be much lower in public radio, but it appears as though they are not.

It's only been a few years since public radio really started to think about net fundraising revenue and how to earn money more efficiently. If there is anything to be learned from this latest report, it's that the time for thinking about it is over and the time for acting on it is now.

Do Networks And Stations Have Different Audience Goals?

A few private responses to the Audience Loss posting asked for more explanation on why AQH, or average audience, was more important than Cume, or total audience.

The reason is pretty straightforward. A listener counts in the Cume if he or she listens for just five minutes a week. We know from decades of research that five minutes of listening a week won't turn a listener into a contributor. It's not enough. As previously noted, a station must get someone to listen again and again for the AQH to grow. Focusing on AQH requires that a station build listener loyalty and, therefore, the base of potential contributors.

But the networks don't count on listener contributions for their income (though PRI now accepts individual donations at its web site). On the surface, that makes AQH less meaningful to the networks. They want to put the biggest number possible in front of their stakeholders, potential supporters and partners, competitors, and in some cases, critics. It sounds better to talk about 30 million weekly listeners than an average audience of 2 million listeners.

This is where network audience goals and station audience goals might be in conflict. Networks want more listeners so they try to increase audience by adding stations to their line-up, by getting more programs on each station, by getting better time slots for programs on each station, and by making programs for new audiences.

In other words, networks often focus on growth strategies that don’t necessarily help stations one bit. The best example of this is when a network boasts about a new program being "the fastest growing program in public radio." That says nothing about the quality of the program, as we’ve recently seen. “Fastest growing” is really a statement about the marketing department's ability to get clearances. Network marketing people should get a huge cash bonus anytime that "fastest growing" phrase is used.

There isn't a station in public radio, however, that couldn't get more listening out of its current audience. Fixing weak parts of the programming schedule gets current listeners to tune-in more frequently and helps grow the AQH audience. The interesting thing about this is that it has the side effect of increasing the weekly Cume. We've seen this repeatedly at stations across the country. The format, market size, or type of licensee doesn't matter. Strong program schedules targeted at the station's Core audience grow AQH and Cume better than schedules designed to reach multiple audiences.

These apparently conflicting audience goals can be reconciled. Network audiences are nothing more than the aggregation of station audiences. There is more sustainable growth for the networks from helping stations grow their AQH over time than looking for 10 new stations to add to the network lineup this year. That's how every significant network public radio program became significant.

Though it seems counter-intuitive, the best way to grow the network Cume is for the networks to adopt growth goals for their client stations. Help stations grow AQH and the network numbers will take care of themselves.

See a related post called "Think Audience." Scroll to the bottom of the page after clicking this link.