To assess the health of each format we look at two key metrics, median station performance and momentum.
The median station is the one in the middle. Half of the stations in the format have a larger share, half have a smaller share.
The median tells us how the format is trending. If we see the median rising, it means mid-pack stations, the majority in the format, are gaining share.
Tracking the median station is more useful than calculating an average share because averages can be distorted by what are called outliers, stations that dramatically outperform other stations in the format.
WPRO-FM had an eleven share in August, yet few CHR stations can crack a six share. Using median rather than average takes that into account in determining the over-all health of a format.
Momentum measures where the format is headed. We look at a station’s latest three months and compare the average share for those months to how the station was doing those same months the previous year.
If more stations are growing than declining, the format has positive momentum.
We found that only 46% of Classic Rock stations are ahead of their last year numbers, but 51% of Alternative stations have grown. In contrast, 52% of Mainstream AC stations are ahead of last year, while only 44% of Hot AC stations have advanced.
The big winner so far has been Country. Nearly two-thirds (63.3%) of Country stations are ahead of last year.
So how’s CHR doing?
Of the 62 CHR stations now in PPM markets, about two-thirds have a year’s worth of numbers. The other one-third rolled out PPM towards the end of 2010.
Momentum for CHR is slightly negative, with only 46.5% of CHR stations ahead of where they were last year.
As we pointed out in a 2010 post called Arbitron PPM Trends vs. a Coin Toss, most of the month to month movement of PPM is random. Stations go up and down for no other reason than luck of the draw:
Share estimates always have two components. The first is the actual number, the share you would find if you could ask everybody what they were listening to, instead of just a small number of panelists.
The second component is statistical noise. It is interference like static drowning out the signal from a distant AM station.
The noise is completely random and unpredictable. Sometimes it adds to the actual share, inflating it. Sometimes it subtracts from the actual share, deflating it.
Both monthly PPM share estimates and quarterly diary share estimates have so much statistical noise in them that it drowns out genuine changes in month to month ratings.
This is why we average three months.
Even with a three month average most formats hover around the 50% positive momentum mark, which means most stations in all formats are essentially churning, neither growing, nor declining.
That’s why it is important to watch momentum over time. Formats that are really growing show positive momentum month after month. Next up, Spoken Word.