How AUDIENCE 98 Links
Underwriting Income to Listening
Underwriting income is income (cash or trade) generated by
underwriting and paid announcements sold by stations. It is the financial support for
programming paid in return for on-air mention of that support. It is listener-sensitive,
in that the organization providing the cash or trade finds value in reaching listeners,
and that value is influenced by the number and qualities of the people in the
audience.
AUDIENCE 98® asked 112 stations with sufficient
Arbitron sample to provide program-specific underwriting income for its Program Economics
analyses. The survey was designed by John Sutton of John Sutton Associates and conducted
by Debora Giovannoni of Data Integrity in the summer of 1997.
Fifty-six stations participated, two of which do not
solicit underwriting for their programming. Although they are not a true "national
sample," AUDIENCE 98 presents and uses them as the current best
estimate of program-specific underwriting information for public radio.
The study collected underwriting information for all
programs that generated at least one percent of all listening to the station in the Fall
1996 Arbitron survey.
Time period. Stations were asked to
report underwriting income from one of three periods:
September 19, 1996 through December 11, 1996, or
September 1, 1996 through November 30, 1996, or
October 1, 1996 through December 31, 1996.
Period One coincides with the Fall Arbitron survey. If
stations could not provide exact information from Period One, they were asked to provide
it from Period Two (second preference) or Period Three (third preference).
Period Three was the third preference because it runs
through the Christmas holiday and there is a presumed change in underwriting patterns and
revenues at this time. Due to software and record keeping limitations, some stations were
only able to provide estimates for one month in the survey period.
Weekly underwriting income averages are calculated from
these numbers to correspond with Arbitron’s weekly audience estimates. AUDIENCE
98 typically shows these numbers as annual totals (in dollars) or as the underwriting
return per listener-hour (in cents).
Limitations. While this study measures
how much underwriting income is generated, it does not ascertain how that return is
achieved. It does not look at units available, sold, or aired as bonuses. It does not
track sales strategy, pricing, or effort. Nor does it control for season (many stations
commented that Fall is their best quarter for underwriting billings).
While not a limitation per se, we note that the study
looks at the total audience generated by each program. In some cases repeats or rollovers
generate audience but return little in additional underwriting. This correctly lowers the
return per listener-hour, but it may seem to under-represent the value of the first
airing.
We also note that while AUDIENCE 98
links underwriting income with reported listening, it is likely that Arbitron estimates
from Spring 1996 or earlier were used to sell the Fall 1996 contracts.
