Arbitron recently released a report on PPM measurement results for August which includes some measurement of AM/FM stations’ streaming audiences. In order to be eligible for measurement, stations have to be encoding the stream for their measurement standards which include certain sample and bit rates. According to this report, 395 AM/FM streaming stations were ready for reporting. Of those, 11 made the .495 weekly Cume Rating minimum reporting requirements.
So what does this mean? First, it’s not surprising that so few stations meet that minimum reporting requirement since the internet radio audience in general is vastly smaller than the broadcast radio audience. Evaluation of an internet radio station should only compare it to other internet radio stations. In this report, stations are compared to broadcast stations. What this actually demonstrates is that PPM, diary, or otherwise, sample sizes are not going to be sufficient means of quantifying individual internet radio station audiences because the samples are designed to capture the audiences of much larger stations. You’d need a much larger sample if you were designing a survey specifically to measure Internet radio stations, because the percentage of the population listening to Internet radio is much smaller.
This report also released some very general information profiling Internet radio listeners. Internet streaming skews 25-54, and is a work day, work week oriented audience. Listeners are well educated. Of all 25-54 panelists, 9.4% listened to encoded streams of AM/FM stations. That number does not include listening to Internet only stations, podcasts, non-encoded stations, or out of market stations which are not included in the surveys.
For stations that are encoding and meeting certain standards, Arbitron will measure AM/FM Streaming stations in either one of two ways – if the station is simulcasting 100% of the content, including commercials, then the data measured can be combined with broadcast station numbers as one audience. PPM measures in-market listening, so it makes sense that stations that are completely simulcasting on the internet should get credit for the streaming portion of that audience.
If the station is not simulcasting 100% of its audience – and is instead inserting different commercials on the stream (or different content for that matter) – then its stream is measured as a standalone station and must meet the minimum reporting standard of .495 for a weekly cume rating in order to show up in the report.
Should stations simulcast their streams?
This raises an interesting dilemma for broadcasters who are streaming. Should they simulcast their streams to earn additional credit in their Arbitron market report, or sell and insert different commercials on the stream? Some broadcasters are choosing to simulcast, hoping that credit for their online audience will lessen the ratings drop they’ll see as a result of PPM measurement. However, it’s unlikely that any station’s online audience will at this point significantly increase its market share.
What’s best for advertisers?
More importantly, Internet radio’s best asset is that the audience is online – and can react to an online call to action in an ad, while traditional radio commercials – often reaching people in cars – mention phone numbers or physical addresses or even texting as a call to action. Accountability and Return on Investment are so critical to advertisers these days. Broadcasters of AM/FM stations should develop a streaming business model that encourages advertisers to create ads for online listeners.
Jennifer Lane has an extensive career in Internet radio and currently publishes Audio4cast, a blog about the business of Internet Radio and Digital Audio. See her blog at www.Audio4cast.com. Her columns will be seen weekly in Only On RBR.com.
