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Conflict within a Radio Station: When Is a Good Book Not a Good Book?

July 11, 2013

The new book just released. Programming is celebrating as the station has shown growth with its AQH share. Just down the hall, the sales team may be looking at the same book with little emotion or excitement. How can these two groups, who are both rooting for higher audience levels, have such different reactions to the same outcome?

This dilemma is a result of how sales and programming judge audience growth. While both teams focus on Average Quarter Hour (AQH), they look at different benchmarks. Programmers look at AQH share, while sales people look at AQH ratings. So what is the difference?

Share, the programmer’s benchmark, is your AQH persons as a percent of those within the demographic that are listening to radio (AQH Persons/Persons Using Radio). Ratings, the sales person’s benchmark, are your AQH persons as a percent of the demographic population (AQH Persons/Population). AQH ratings are a major driving force when it comes to a station’s rate and therefore its revenue. An increase of just 0.1 rating points can result in a significant growth in billing.

Here’s an example:

Book 1 Book 2 % Change
Population 500,000 500,000 0%
Persons Using Radio 70,000 70,000 0%
AQH 3,800 4,200 +11%
AQH Share (AQH/PUR) 5.4 6.0 +11%
AQH Rating (AQH/Pop) 0.8 0.8 0%

 

As this example shows, the station’s share jumped 11% from a 5.4 to a 6.0, but the rating remained at a 0.8. The culprit here is rounding. The rating actually went from a 0.76 to a 0.84.  Unfortunately both round to 0.8. Therefore the 11% growth in AQH share does not help the ratings-driven sales person.

While the example given above shows an increase in AQH, a similar scenario can occur when there is a reported audience loss.

The important thing to understand is that this only impacts transactional sales people who are over-dependent on CPP. Selling the value of your audience and not your station’s CPP is key to maximizing your rate.

So the next time someone renders an opinion on your latest book, make sure you’re both speaking the same language. While they are based on the same estimate, there can be a real difference between a station’s AQH share and its AQH ratings.

-Charlie Sislen, Partner

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