Sunday, February 25, 2007

Eliminating Pledge Drives

Not long ago, a public radio network executive was telling local station managers that pledge drives would be a thing of the past in about five years. One station received a legitimate offer of more than $50,000 per year over several years to eliminate on-air drives. And at last year’s PRPD conference researcher Paul Jacobs suggested stations should only do on-air drives outside of Arbitron surveys in order to build audience. Most markets are surveyed 48 weeks out of the year, leaving four weeks over the summer and around Christmas for fundraising.

That’s a moot point now because every week will be a survey week when Arbitron’s PPM measurement system is in place. But the severity of these suggestions reaffirm that listeners don’t like pledge drives. We know stations benefit greatly, financially and in audience perceptions, when they act to mitigate the downsides of pledge drives.

Could we eliminate them altogether? Let’s do the math. It’s cocktail napkin math, but the scale is right.

Pledge drives generate about $107 million per year in direct gross income. That’s about 14% of all gross revenues in public radio including all individual giving, underwriting, subsidies, grants and entrepreneurial income.

Pledge drives generate roughly 1.2 million donations per year. Replacing all of those donations completely through off-air means would require a minimum of an additional 24,000,000 appeals -- direct mail letters, email appeals, and telemarketing calls.

That’s assuming an average response rate of 5%, which would be quite good given that about half of all pledge drive donations come from listeners who have given before and not responded to renewal mail, telemarketing, and email appeals. It also assumes that the average gift would be the same as achieved through on-air drives. That’s no sure bet.

The annual value of pledge drives to stations is much higher than the $107 million. Public radio depends on on-air drives to acquire or keep 900,000 names on the annual membership roles. These names are essential to the $148 million per year stations raise through the mail, email, telemarketing, and major donor efforts. This is an essential point. New donors, renewing donors and lapsed donors who give this year create the foundation for next year’s revenue base, both on air and off.

To summarize; the challenge of eliminating pledge drives is not only replacing the $115 million in annual income they generate but also replenishing the donor base so next year’s off-air income can grow.

Next time -- thoughts on how public radio can do that.

Sources: CPB's Public Broadcasting Revenue report for FY 2005, DEI's Benchmarks for FY 2005, JSA calculations.

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Blogger Barry Rueger said...

I still believe that if a pledge drive is done well it has benefits beyond cash donations.

It can showcase and celebrate the work done at a station, it can build a team spirit among staff and (where they still exist) volunteers, and it can be one way to give listeners a little bit of a look behind the scenes.

I think that we are too quick to discount the pleasure and the thrill that an average listener enjoys in calling in a pledge, and in hearing it acknowledged on the air.

These things may not be immediately measurable in terms of bottom line, but I'd wager that they are one part of building long term relationships.

8:56 PM  
Anonymous Anonymous said...

If you're going to eliminate pledge drives, kill two birds with one stone!

During pledge week(s), set your HD-2 or -3 Radio mulitcast stream (assuming you have one) to be a reasonably close copy to your normal programming schedule on the main analog/HD-1 channel. However, eliminate (or greatly reduce) the amount of fundraising pitches.

Meanwhile, back on the HD-1 channel, continue the fundraiser as per normal, but frequently mention that HD Radio listeners can get fundraiser-free programming on the HD-2 channel if they have an HD Radio. How do they get an HD Radio? Go to the station's website or call XXX-XXX-XXXX to find out.

Then rig a barter or commission deal with the local Radio Shacks to drive listeners who want an HD Radio b/c of your fundraiser. Make sure the listeners can easily click-thru from your website to buy very easily. And make sure the Radio Shacks have enough tuners in stock!

In the process, you've also jacked up the value of your underwriting spots on the HD-2 & -3 channels.

Rinse, lather, least until fundraising starts taking too big a hit because all your listeners have gone out and bought HD Radios.

7:07 PM  

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