Background
One of our larger research streams at the Institute is ‘what’s an ad worth?’ – aiming to determine the value of an ad spot across media and conditions.
One key media principle (see Report 66 for more details) is to select media that reaches as many category buyers as possible. Radio’s weekly reach is similar to TV, but outside of TV’s prime time. Therefore, radio can complement a TV-led campaign. Since reach is vital for brand growth, marketers place radio in the top five for media spend (WARC Data 2018). In America, radio attracts US$14bn (7% of media spend), and in Canada US$1.2bn or 12% of media spend (WARC Data 2018).
Despite new audio services (e.g., Spotify), little has changed for the nature of radio listening. In North America, radio is listened to 25 times longer and by 10 times more people than Pandora or Spotify (adapted from, Edison Research 2017; Faison 2017; Radio Advertising Bureau 2016; Vetrano 2018). However, as popular as radio is, there exists a lack of empirical and independent research on audience retention. Without evidence to compute “real” ad-ratings, marketers have made assumptions that a third of the program audience is lost when people switch stations, also known as mechanical avoidance (Generali, Kurtzman & Rose 2011). This “active” mode of radio ad avoidance includes: switching stations, muting the sound, or turning off the radio device during ad breaks. To offset for less people reached, marketers would need to buy more radio ad spots to maintain coverage. Marketers that buy more ad spots risk having higher frequency, diminishing the return on each extra ad exposure (see Report 55). Ad spots across the day and during different content types are tested by this study to determine what factors might influence avoidance behaviour.
Method and Data
Portable people meter (PPM) data tracked listeners in minutes (N~800 panel members), capturing listening behaviours by media factors (Music content vs. Talk and In-home vs. Out of home) and audience factors (preferred time of day). Ad-ratings were computed for 17 commercial radio stations across Vancouver, British Columbia, in Canada. In total, data was collected across weekday dayparts (6am to 12am) for four months, one month for each season, representing: 2,988,518 programming minutes and 534,071 advertising minutes, containing 841,003 individual ad spots. Of all the ad breaks tested, 42% comprised of one ad-unit, which exhibited a minimal variation in ad-ratings. Each ad break was for one minute or longer. Ad-ratings covered ad spots, station promotions and public service announcements. This ad-rating data captured the audience retained during ad breaks. Because the PPM data were aggregated, an online survey of individual radio listeners in the same region was conducted to capture individual level behavioural data.
To determine average mechanical avoidance we measured the net audience reached by advertising using the ‘ad ratio’ (Danaher 1995). For our study, the ad ratio was derived from the average ad break audience divided by the average program audience in a daypart. For example, if the ad rating was below the program rating (below 1, e.g., 0.97), this indicated mechanical avoidance.
Results
The results for this study, across four months in one year show:
Mechanical avoidance of radio ads is typically low across weekday dayparts. On average, the rating dropped by 3% during the break (see Table 1), i.e., if the audience was 100 people before the break it was 97 during, far less than the previously assumed rate of 22-32% (Generali, Kurtzman & Rose 2011).
Music stations encourage slightly higher rates of mechanical avoidance. One variation was that music stations had a higher programme rating and a slightly higher rate of mechanical avoidance at 4%, one percentage point difference on average (see Table 1).
Out-of-home (OOH) listening has a slightly higher rate of mechanical avoidance. Most radio listening is done OOH in which slightly higher mechanical avoidance is also seen at 3%, two percentages points more than in-home (see Table 1).
Table 1: PPM – Effects of Program Content, Listening Location, and Daypart on Ad-ratings
Notes: Numbers are average ad ratios, the ratio of the audience for ad breaks compared with the average audience for programs. For example, 0.96 means the ad audience was 97% of the size of the program audience (i.e., the avoidance rate was 3%). Talk radio ad ratio ranges from 0.93 to 1.07.
N ~800
Across the day, mechanical avoidance is low. There is slightly more mechanical avoidance during the early dayparts, music stations, and out-of-home listening.
Summary & Implications
This study suggests that radio program ratings do reflect what a marketer’s ad spot will deliver. Overall, mechanical avoidance of radio advertising is low.
Managerial implications support previous media and advertising research from the Ehrenberg-bass Institute.
When planning radio media for a reach strategy, marketers are encouraged to pick large stations (see Report 66), usually music types. Although music stations have slightly higher mechanical avoidance than talk stations, any audience lost is offset by having higher reach.
Plan for incremental reach (see Report 57). One option is placing ad spots early in the working day, as they have higher ratings and low mechanical avoidance. There are twice as many people on the move and listening in short sessions before 3pm. In the evenings, incremental reach is reduced as the proportion heavy listeners increases and ratings drop two thirds after 7pm.
Recommended reading list: Corporate reports and white papers
