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How AUDIENCE 98 Links
Underwriting Income to Listening


Underwriting income is income (cash or trade) generated by underwriting and paid announcements sold by stations. It is the financial support for programming paid in return for on-air mention of that support. It is listener-sensitive, in that the organization providing the cash or trade finds value in reaching listeners, and that value is influenced by the number and qualities of the people in the audience.

AUDIENCE 98 asked 112 stations with sufficient Arbitron sample to provide program-specific underwriting income for its Program Economics analyses. The survey was designed by John Sutton of John Sutton Associates and conducted by Debora Giovannoni of Data Integrity in the summer of 1997.

Fifty-six stations participated, two of which do not solicit underwriting for their programming. Although they are not a true "national sample," AUDIENCE 98 presents and uses them as the current best estimate of program-specific underwriting information for public radio.

The study collected underwriting information for all programs that generated at least one percent of all listening to the station in the Fall 1996 Arbitron survey.

Time period. Stations were asked to report underwriting income from one of three periods:

Period One coincides with the Fall Arbitron survey. If stations could not provide exact information from Period One, they were asked to provide it from Period Two (second preference) or Period Three (third preference).

Period Three was the third preference because it runs through the Christmas holiday and there is a presumed change in underwriting patterns and revenues at this time. Due to software and record keeping limitations, some stations were only able to provide estimates for one month in the survey period.

Weekly underwriting income averages are calculated from these numbers to correspond with Arbitron’s weekly audience estimates. AUDIENCE 98 typically shows these numbers as annual totals (in dollars) or as the underwriting return per listener-hour (in cents).

Limitations. While this study measures how much underwriting income is generated, it does not ascertain how that return is achieved. It does not look at units available, sold, or aired as bonuses. It does not track sales strategy, pricing, or effort. Nor does it control for season (many stations commented that Fall is their best quarter for underwriting billings).

While not a limitation per se, we note that the study looks at the total audience generated by each program. In some cases repeats or rollovers generate audience but return little in additional underwriting. This correctly lowers the return per listener-hour, but it may seem to under-represent the value of the first airing.

We also note that while AUDIENCE 98 links underwriting income with reported listening, it is likely that Arbitron estimates from Spring 1996 or earlier were used to sell the Fall 1996 contracts.

 – John Sutton
AUDIENCE 98 Associate

 

Audience Research Analysis
Copyright ARA and CPB.  All rights reserved.
Revised: September 01, 2000 12:38 PM.