Radio Stations Go by ‘The Book’ to Get Ahead

Earlier this month, radio executives began scrutinizing a soft-cover volume as thick as a small-town telephone book--and with just as many numbers.

The volume was the latest Arbitron quarterly ratings report, measuring the listenership of virtually all radio stations by age, sex and time slot. And its myriad figures can affect personnel, programming and profitability.

It is, in radio parlance, “The Book.”

Though some criticize radio ratings for underestimating the number of listeners, and others soft-pedal the impact ratings have on decisions, few doubt their significance.

“They’re not the exclusive consideration in what we do, but I would say they’re a very important consideration,” says David J. Barrett, vice president and general manager of news talk WBAL-AM--Baltimore’s top-rated station, according to Arbitron--and WIYY-FM.

“They are what make and break (general managers, program directors) and announcers,” says Roy Deutschmann, general manager of WXYV-FM, Baltimore’s second-rated station, and WCAO-AM. “They are our bibles.”

Currently, the newer Birch Radio is vying with older, more established Arbitron for a place on radio programmers’ nightstands. The rival ratings services have a nationwide competition that is as intense, if not as close, as that among, say, stations for listeners between the ages of 18 and 34.

Arbitron, which has been measuring radio audiences since 1964, boasts more than 1,800 station clients across the country. Birch, which began doing the same thing 13 years ago, claims more than 950 and hopes to reach 1,000 by the year’s end.

The two services differ most significantly in the way they measure radio’s audience; a quick examination of those differences provides an insight into how radio ratings are compiled and what their limitations are.

Both begin by calling telephone numbers in computer-generated samples defined by ZIP code information based on census data. Birch then attempts to conduct a 10- to 15-minute verbal survey of the previous day’s listening habits. Arbitron asks the person who answers the phone to keep a diary of his or her radio listening for a week. If the person agrees, the company then sends out a small booklet to be returned at the end of the seven-day period, along with a premium that ranges from $1 to $5, with the largest amount sent to young males, who traditionally are most lax about returning the diaries. Both services engage in weighting, or sample balancing, based on race, sex and age.

Birch says that its method is superior primarily because it results in a higher response rate--60%, versus about 40% for Arbitron. “That’s the most important difference,” says Scott Chapin, Birch’s market manager in the Baltimore area.

But Arbitron, while saying that it would like to have a higher response rate, says that its data, nevertheless, provides a more accurate reflection of radio listeners’ habits. Jim Peacock, Arbitron’s director of research, says that the method of asking listeners to recall what they listened to yesterday tends to “underestimate listening away from home and listening to less well-known stations.”

“Birch has a strong tendency for the No. 1 station to show a disproportionate share (of the market),” Peacock says. “You remember that which is best-known.”

Arbitron says that because its diary can be taken in the car and to work, it provides a more accurate record of listening away from home. Birch’s Chapin concedes that that is true in theory but says, “The problem is most people don’t carry it with them.”

Whatever the merits of the methodologies, there is no doubt that they produce somewhat differing results. Chapin says that the reason for the differences is that “Arbitron will always favor an older-formatted station. The older mind-set is more apt to send that diary back.” Arbitron’s Peacock agrees that Birch shows higher figures for younger-oriented stations but says that among the possible explanations is that respondents to a telephone survey tend to report what they prefer to listen to, not “what they’re exposed to” at work and elsewhere.

That the Birch and Arbitron ratings contain discrepancies raises questions about the validity of the data from either service.

Many in radio believe, somewhat self-servingly, that neither service reflects the number of people listening to radio. Jim Fox, general manager of Baltimore’s B-104, complains about the low numbers of people surveyed (to measure the winter ratings, Arbitron sent out 3,600 surveys and got back 1,949 usable diaries) and says, “I don’t think they’ve devised a methodology to accurately measure listenership. More people listen to radio than these surveys give us credit for. If the true numbers were known, more (advertising) dollars would be in radio.”

The cost of subscribing to the ratings services is not cheap. Arbitron, which has its headquarters in New York but its research facilities in Laurel, Md., charges stations about $100,000 a year to receive its service; New Jersey-based Birch charges about half that amount. The cost to advertising agencies is a small fraction of that.

What makes the services worth so much to the stations is that they allow the stations to adjust their advertising rates. Asked the difference in revenue between a No. 1 station in the area and a No. 10 station, Betsy Vonderheid, media director for the Reeves Agency, a Baltimore advertising agency, answers simply: “A lot.” Some sources place the difference at about $5 million a year in revenue.