Nielsen’s Newswire rating analyses create headlines with their portrayal of rating trends like a horse race. For example, this from a recent release:
“With the release of the August PPM radio listening trends, we can see which formats benefitted the most from summertime audience trends, and a surprise contender has emerged from the pack.”
The problem is that these “trends” are not what they seem.
Nielsen claims that the analyses are a national measure of the health of formats. Their press releases describe formats as “cooling” or “falling” giving the impression that those formats must be declining.
The truth is that Nielsen’s trends have nothing to do with how the majority of stations in a format are doing. In fact, the majority of stations in a format can be trending up at the same time that Nielsen is telling us that the format is declining.
The ratings service derives their “trends” by crunching all radio listening in the 45 non-imbedded markets to determine a national PPM Average Quarter-Hour (AQH). If the total AQH (ultimately expressed as a share) increases, they speak as if the format is growing. If AQH declines, the format is too.
The problem with this approach is that large markets contribute most of the AQH. More than a quarter of all PPM listening takes place in New York, Los Angeles, and Chicago. As the graph at the right illustrates, half of all listening takes place in the top ten markets (click to enlarge).
A major swing in one direction for a station in the majors can nullify a swing in the other direction on the part of dozens of stations in smaller markets.
Sports radio, already on the uptick as we reported last month, shot upward in October, setting several records along the way.
Every new station contributes quarter-hours to a format’s AQH. The more stations that move into a format, the higher the format’s share.
This phenomenon can result in upbeat Nielsen reports on formats where the majority of stations in the format are losing share!
A positive trend generated by growing numbers of stations reflects the industry’s belief in a format, but it tells us nothing about whether the format is growing or fading with listeners across the country.
Combine the impact of large markets with the impact of changing format counts and the Nielsen reports can be very misleading.
Not long ago a Nielsen report fueled a “Talk Radio is Dying” meme, leading to a great deal of hand-wringing within the format. According to Nielsen, Talk radio was seeing significant declines in the national trends.
The problem with the analysis was that most of the “trend” was actually driven by what was happening at a few outsized major market Cumulus Talk stations.
WABC, KABC, WLS, KGO, and others had lost a third of their collective quarter-hours. No reasonable rate of Talk station growth in the other PPM markets could make up for the cratering of these few stations.
The listenership losses were the equivalent of an entire small PPM market signing off.
Remember this next time you see a Nielsen report on the health of your format. It really tells us nothing about how the majority of stations within your format are doing.
To find out how a format is really performing, we have to see how all stations in the format are doing, not just a few large market stations.
We’ll show you how that is done in the next Radio Insights.