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October 17, 2006

New Study: Radio Commercials Retain 92% of Listeners

According to recent study by Arbitron, Media Monitors, and Coleman, an average of 92% of the lead in audience sticks around to listen to radio commercials. The study "analyzed 93,876 radio commercial breaks from November and December 2005 in Houston, Texas, comparing the audience level for each minute of a commercial break to the audience for the minute before the commercials began."

Arbitron's press release cites the following key findings:

- The lowest rated minute during an average commercial break in morning-drive is 94 percent of the lead-in audience. The high level of audience retention in the morning-drive daypart suggests greater listener engagement in the morning and substantiates the value of morning-drive inventory.

- The audience for one-minute breaks is nearly the same as the lead-in audience (99.6 percent), and the lowest rated minute in two-minute breaks is 94.7 percent of the audience prior to the spot break.

- The lowest rated minute during three-, four-, five- and six-minute breaks ranges from 87.7 percent to 89.4 percent of the lead-in audience.

- Radio audience levels do not drop significantly during the third, fourth, fifth and sixth minutes of a commercial break. While audience levels are higher during the first and second minutes of the longer break, they "level off" between the third and sixth minutes of a commercial break, as many listeners return to stations toward the end of stop sets.

- Younger listeners are more likely to tune out of commercials than older listeners. Even among younger listeners, however, radio audience levels remain very high during commercial breaks.

The data reported stand in contrast to widely held perceptions of advertisers/advertising agencies and those who work in the radio industry. A web poll of 200 advertiser/agency people said they thought on average that radio retained only 63% of the audience size one minute prior to the break. A similar poll of people in the radio industry showed they believed only 68% of listeners are retained.

What does this mean for radio advertisers? Well, first let's have some healthy skepticism of the data and analysis since this study was conducted by firms with at least an indirect interest in the results reported. But if we take it at face value, what are the implications for direct response advertisers? Well, the obvious is ... be first in the break whenever you can. And, when results fall off, look at changes in average position in the break as a possible explanation.

But beyond that, this isn't a huge breakthrough for direct response radio advertisers. Why? Because we hold the stations responsible for bottom line performance. If listernship is retained at 92% on average, that's fine but if the performance isn't there, the station loses our business.

Posted by Jeff Small & Brett Astor at 04:48 PM | Permalink