Radio Metrics: Arbitron Radio Rating

A particular challenge with radio is that consumers tend to misattribute radio advertising memories to other media, particularly TV. This is particularly likely to happen where there is a strong executional link between the two media and/or where there is an established history of TV advertising for the brand.

The tendency to misattribute can be offset by using matched samples of listeners and non-listeners. This way, if the increase in advertising awareness is greater among listeners than it is among non-listeners, then the effect can be attributed to radio fairly confidently even if the listeners think the advertising was in another medium. This is the approach we use for Radiogauge.

To evaluate the success of a campaign based on specific business outcomes such as response or sales, it is best to compare data across a region that receives radio advertising and a region where no radio advertising is taking place. These regions should be broadly matched in terms of populations profile and exposure to all other media activity ideally in the same TV region.

To help you track your radio effectiveness, concentrate on the following five key performance indicators (KPIs):

1. Reach

One of the greatest benefits of radio advertising is its ability to connect with large numbers of consumers. Therefore, one of the most important KPIs to consider when purchasing airtime is reach. By looking at past records and historical data, media buyers can estimate the expected reach of broadcasts in particular markets and set conversion goals.

2. Brand Awareness

Although a specific marketing message or special offer may bring consumers to your door, brand awareness is essential if you want to keep them coming back.

You can gauge the ability of specific radio spots to build brand loyalty through a range of informal and formal initiatives. For example, pay attention when clients or customers mention a particular ad when visiting your organization. More formally, you can conduct surveys of the general population both before and after the ad airs to ask whether or not they have heard of your brand. You can also measure the effects of the ad on your brand-specific social media growth.

3. Website Traffic

When it comes to measuring overall website traffic, take a longer approach to determine overall effectiveness. Compare your total number of website visitors after you began running radio ads to your total number of website visitors during the months and years that came before. Consider the effects of changes in specific website conversion rates and general increases in branded traffic (comprised of visitors who arrive at your website after typing your brand name into a search engine).

4. Gross Sales

Conduct year-over-year and month-over-month analyses to see if sales are up or down in relation to the airing of your radio ads. A radio specific discount can be an outstanding way to track its effectiveness. When consumers ask for that discount online or in your brick-and-mortar location, you will know for certain that they heard your ad spot.

5. Return on Ad Spend

After you determine your gross sales and estimate how much of those gross sales can be attributed to your radio ads, you can calculate your overall return on ad spend (ROAS) by dividing the revenue from gross sales by the total amount that you spent on the radio advertisements. This KPI will ultimately encapsulate your radio effectiveness as a whole.

Arbitron Radio Rating

Nielsen Audio (formerly Arbitron) is a consumer research company in the United States that collects listener data on radio broadcasting audiences. It was founded as the American Research Bureau by Jim Seiler in 1949 and became national by merging with Los Angeles-based Coffin, Cooper, and Clay in the early 1950s. The company’s initial business was the collection of broadcast television ratings.

The company changed its name to Arbitron in the mid‑1960s, the namesake of the Arbitron System, a centralized statistical computer with leased lines to viewers’ homes to monitor their activity. Deployed in New York City, it gave instant ratings data on what people were watching. A reporting board lit up to indicate which homes were listening to which broadcasts.

On December 18, 2012, The Nielsen Company announced that it would acquire Arbitron, its only competitor, for US$1.26 billion. The acquisition closed on September 30, 2013, and the company was re-branded as Nielsen Audio. As a condition of the deal to allow a monopoly, Nielsen must license its ratings data and technology to a third party for eight years.

Survey

Arbitron’s syndicated radio ratings service collects data by selecting a random sample of a population throughout the United States, primarily in 294 metropolitan areas, using a paper diary service 2‑4 times a year and the Portable People Meter (PPM) electronic audience measurement service 365 days a year.

The term commonly used in the radio industry for these ratings is Arbitron book, a carryover from the era when ratings were published in a softcover report that was mailed to clients. More specifically, in the diary-measured markets these reports were called the “Spring book”, “Summer book”, “Fall book”, and “Winter book”. Between these “books”, Arbitron releases interim monthly reports called “Arbitrends”, which contain data from the previous three months known as “rolling average” reports. The two interim reports would be known, for example, as “Spring, Phase I” and “Spring, Phase II”.

Arbitron recruit’s diary survey respondents to note their listening habits in a seven-day paper diary and mail it back to Arbitron. The respondents are paid a small cash incentive for their participation. Turnaround time for release of data from the end of the survey period is approximately three weeks.

After collection, the data is marketed to radio broadcasters, radio networks, cable TV companies, advertisers, advertising agencies, out-of-home advertising companies, and the online radio industry. Major ratings products include cume (the cumulative number of unique listeners over a period), average quarter hour (AQH Share the average number of people listening in a given 15‑minute period), time spent listening (TSL), and market breakdowns by age, gender, and race/ethnicity. It is important to understand that the “cume” only counts a listener once, whereas the AQH is a product of “cume” and time spent listening. For example, if you looked into a room and saw Fred and Jane, then 15 minutes later saw Fred with Sara. The “cume” would be 3 (Fred, Jane, Sara) and the AQH would be 2 (an average of two people in the room in a given 15‑minute period).