Know the Size of the Pie

March 10, 2021

For programmers, there are numerous ways to judge success. However, success is limited if the programmer does not know the ultimate potential. The size of the pie is the maximum amount you can get – is that big enough to be successful? Since it’s nearly impossible to get the entire pie, how big of a slice do you need to declare success?

There are several ways to measure this potential. Let’s focus on demographic and format.

Demographic Pie

Most programmers focus on broad demographic groups like Adults 18-49 and Adults 25-54 when they are judging their success. These are not focused demographic groups but family reunions. We often suggest to program directors to know how each segment of these broad demographic groups are listening to radio. Obviously, a Hispanic Male 25-34 listens to radio differently than an African American Female 45-54. However, both are components of Adults 25-54.

Are the demographic cells that you are targeting light or heavy to radio? Especially for those segments that are light to radio, you need to make sure that you are over-delivering them, in other words, getting a giant slice of a small pie. Just getting your fair share of this small pie will not be adequate to perform well in those broad demographic groups. Focusing on the proper segments is the only way to succeed in the broad demographic groups.

Format Pie

Successful stations don’t exist in a vacuum. Most have direct competitors, which gives their listeners alternative options. Most good PDs focus on these alternatives on a station-by-station basis. I am doing better than station A, but getting beat by station B.

A better way to look at it is by the size of the format pie. Two important questions:

• Is the format big enough for the number of stations the pie represents?
• What is my slice of that pie?

For small pies, a successful station needs a big slice. Conversely, a big pie can allow a station to be successful with a smaller slice.

• If the pie is just two stations, you need to get over 50%.
• If the pie is five stations, you can be successful with a little more than 20%.

This analysis should be done on the broad demographic group, but as explained above, it is more impactful to also examine on a demographic cell and segment basis. Are you winning in the demographic cells that offer the biggest pie?

We all love pie. The bigger the size of the pie and the bigger your slice, the more successful you can be.

Need further information on understanding the size of the pie and how to grow your slice? Please reach out to us here.

-Charlie Sislen, Partner

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