RadioSutton

PMDMC Did Little to Clarify the Future of Pledge Drives

noreply@blogger.com (RadioSutton) — Wed, 15 Jul 2015 16:21:00 +0000

There were two sessions on the future of public radio pledge drives at last week's Public Radio Development and Marketing Conference In Washington, DC. The conference was organized by Greater Public, the industry's trade group for fundraising and marketing professionals.

Here's a summary of the main points from those two sessions.

1. It is getting harder to raise money during pledge drives.

2. Greater Public presented a formula for lowering pledge drive goals to counter the impact of sustaining (monthly) givers and $1,000+ donors on drive results. The example shown at the conference suggested goals should be lowered by as much as 25%. The exact percentage will vary by station. The more successful a station is with Sustaining Givers, the lower the goal will be.

3. Greater Public's Fundraising benchmarks show that up to 90% of stations still had room to increase annual listener income through pledge drives.

Unfortunately, those three points taken together lead to just one conclusion -- many stations will need to do more on-air fundraising with lower goals in a tougher fundraising environment in order to meet their listener income potential. That's a recipe for more pledge drive days and, perhaps, more pledge drives per year.

A separate, but related, thread in these sessions was the new wave of shortening or eliminating pledge drives. Station representatives from Phoenix and upstate New York presented their current approaches to reducing on-air drives.

As noted in a previous post, we always learn something new and valuable when stations embrace more programming and less on-air fundraising. What hasn't changed in nearly two decades of drive shortening efforts is this -- the less on-air fundraising a station does, the less room it has to increase its on-air goals.

We know from past experience that the less on-air fundraising approach doesn't rule out growing annual listener income. Most of that growth, however, has to come outside of pledge drives. That conflicts with Greater Public's assertion that most stations still have growth potential from on-air drives, even in a tougher fundraising environment.

In the end, the conference sessions did affirm the difficulties stations face and that could help foster productive dialogue between fundraisers and their station managers. But moving forward to the Fall fundraising season, PMDMC didn't deliver any new industry-wide intelligence on how to address the pledge drive challenges ahead. It feels like a missed opportunity.

Rethinking Public Radio Station Brands

noreply@blogger.com (RadioSutton) — Wed, 08 Jul 2015 21:18:00 +0000

This week Public Radio Fundraising and Marketing professionals are meeting in Washington DC at the Public Media Marketing and Development Conference.

Public Radio branding is one of the big topics as NPR News stations try to figure out how to remain relevant as listeners gain more direct access to their favorite NPR content.

A few years ago, the mantra was that Local is the Future for stations. That hasn't worked out so far and probably won't since NPR News listeners consider themselves citizens of the world. They are the epitome of "think globally, act locally." The range of potential content available in a station's market is simply too narrow to win enough listening to remain sustainable.

Thanks to a resurgence of podcasting, many stations are asking if their future is in podcasts. Perhaps, but not solely. Stations will need NPR as part of their broadcast and digital brand in order to remain viable, let alone grow, in the future.

They can do that as public media brand aggregators.

Think of it this way. NPR is Apple. Stations are Target, offering the leading brand (Apple) but also other top digital and electronics brands. Consumers can get most of Apple's products from either brand. They can shop online. They can go into an old-fashioned brick-and-mortar.

Some consumers shop for Apple only through Apple. Some shop only through brand aggregators such as Target. Some do both. The same behaviors will unfold in public radio. The good news is that there's plenty of room in listeners' minds and hearts to embrace both.

Stations have always been brand aggregators by carrying programs such as Marketplace from APM, This American Life, and the Moth. In the past, it almost worked against station interests to highlight those brands.

Maybe that's changing. Consumers in the digital space are now learning that not everything good in public radio is from NPR. They're learning there is more than one quality brand.

Being a quality brand aggregator can be a brand too! Stations have an opportunity to become a primary source of the best brands in public radio -- over the radio and in the digital space. Stations have the opportunity to be the place to find listeners their favorite brands and discover new ones.

One of those new brands should be the station's original programming, which does not necessarily have to be local and it doesn't have to be just news. It has to be enriching and engaging. It has to be comparable in quality to the best existing brands in public radio. It can be on the radio, digital, or both. Sense of Place is important but it is not necessary 100% of the time.

Great original content, easily found and consumed along side the best national content in public radio, will create a station brand that still highlights NPR but is much more than NPR.

I think this is a highly viable approach for stations. It works for Apple, perhaps the strongest consumer brand out there. It works for Target. It could work for NPR, stations, and other producers and distributors in public radio.

Should Public Radio Offer Incentives to Attract New Digital Listeners?

noreply@blogger.com (RadioSutton) — Tue, 09 Jun 2015 13:53:00 +0000

The strategic use of incentives helps make public radio pledge drives more successful. They help boost the number of donations during key dayparts. They motivate some listeners to give at certain pledge levels and in ways that are beneficial to the station.

Incentives were successfully used in the late 1980s and early 1990s to encourage listeners to give via credit card instead of asking for an invoice. One of the most popular credit card incentives was an annual subscription to Newsweek magazine. Each subscription cost the station a dollar.

Incentives were successfully used in the late 1990s and early 2000s to encourage giving via the station web site. Stations held special “cyber days” to get listeners to give online. One of the most famous cyber days was in 1999 at WAMU when the station gave away a new Volvo.

Public radio has no problem offering incentives to generate contributions and encourage ideal giving behaviors. Why not try the same for digital listening?

We know from decades of research that listening causes giving. And having more listening makes it easier to generate more underwriting revenue. Getting more listening, generating more public service, is the best fundraising a station can do. It might make sense to accelerate digital listening by offering some incentives for listeners to try it.

It’s an interesting prospect. There could be incentives for downloading an app or registering to listen online. There could be incentives for first use or the first ten hours of listening or a certain number of podcast downloads.

What types of incentives? That’s the fun part. We get to test.

Maybe it is offering bonus content or a coupon code for the NPR Shop. Maybe it is a dining discount with an underwriter or a digital coupon for a local bookseller. Perhaps it is a “vintage” t-shirt or mug from the back of the premium closet. Maybe a Bluetooth speaker is offered at a special discount price to digital listeners who use the station 10 times over two weeks.

Digital listening is supposed to be an essential component of public radio’s future. That means public radio’s finances will depend on it. It just might be worth the testing whether incentives can accelerate digital audience growth.

Promoting Digital Listening Like Your Survival Depends On It

noreply@blogger.com (RadioSutton) — Sun, 07 Jun 2015 19:56:00 +0000

How would you promote your public radio station’s on-line stream if the station’s very existence depended on it?

It’s not a hypothetical question. Every public radio station faces that situation today as more of its listeners and donors spread their listening across broadcast and digital platforms.

It wasn’t a hypothetical question five years ago for Classical KDFC in San Francisco. KDFC was a commercial radio station and its owner decided to drop the format. Classical music lost its home at 102.1 FM.

The University of Southern California and KUSC stepped in and acquired two lesser signals on which to broadcast KDFC as a public radio station. Two frequencies. Far less coverage. More than 100,000 distraught listeners who could no longer hear the station over the air.

KDFC already had a good digital presence. It had streams and mobile apps. It was social media savvy. It had a good database and a newsletter.

KDFC researched the many ways listeners could easily hear its programming through digital platforms. It developed recommendations for Internet radio options and how to use Bluetooth to send sound to external speakers. It developed the simplest possible narrative for communicating those options. It heavily promoted that narrative across all available touch points. This went on for months.

Listeners who could no longer hear KDFC reached out to the station as well and KDFC was prepared to help them with information and support. That support went as far as KDFC’s program hosts returning phone calls from listeners and walking them through the steps necessary to hear the station online. It was a daily occurrence.

Embedded in KDFC’s story is a template for how all public radio stations should be promoting their digital listening options.

Start with the goal of helping as many listeners as possible learn to create a quality listening experience on a computer, to listen via an app, to use external speakers at home and in the car, and to find and listen to a podcast or on demand content.
Have up-to-date and easy to use digital listening options.
Develop a simple narrative describing the benefits of using the station’s digital offerings, including step-by-step instructions on how to get the most out of each option.
Promote the heck out of it using every possible touch point, including on-air.
Provide prompt individualized customer service when needed.
Rinse and Repeat.

That last point is really important. Rinse and repeat.

KDFC ended up with five different radio signals throughout the Bay Area. Most of its previous coverage area was restored three years ago. In some areas the station has even better coverage. KDFC promoted those new signals even more heavily than it originally promoted online listening, including billboard and bus card advertising, and has rebuilt much of its audience.

Still, 5 years after losing its original signal and 3 years after restoring most of its coverage, a pledge drive doesn’t go by without hearing from past listeners who are just discovering that KDFC is back on the air in their community. They didn’t get the message.

Rinse and repeat. There’s always someone who didn’t hear the message. There’s always some who has just discovered your station for the first time.

Growing digital listening is too important to not be engaged in continuous promotion. To borrow and modify an old slogan from PBS, if you aren’t going to effectively promote your own digital offerings, who will?

If Digital is the Future, Public Radio Needs to Promote it Better Now

noreply@blogger.com (RadioSutton) — Thu, 04 Jun 2015 19:23:00 +0000

I just spent part of the last two days listening to 50 station breaks across 14 different large and medium market public radio stations. Every station is considered to be a top station in public radio and most are considered to be digitally savvy. Some quick numbers:

43 of the breaks (86%) had absolutely no promotion for the station's digital listening offerings.

8 of the 14 stations had no digital listening promotion. I listened to at least 3 breaks in one hour for each station.

Of the 5 stations that had some sort of digital listening promotion, 3 mentioned more than one type of digital listening in the same break. For example, the website was promoted as a way to stream the station and as a way to hear the station's new podcast.

1 station qualified as promoting digital listening only because it included the website in its legal ID, "...and online at WXZY.org." That's more of a throw away mention than a promotion, but I still counted it.

There's not a whole lot to say here other than this is a woefully inadequate level of self-promotion given the importance of digital listening to public radio's future. It is a notable lack of promotion given public radio's decades-long marketing lament, "If only more people knew about us."

When it comes to digital, even the people who know about us through the radio probably don't really know about our digital offerings.

It is going to be tough enough to win new listeners with the infinite number of media options now available in the digital space. Stations need to make it a priority to move as many current listeners as possible to its digital platforms. That starts with the station selling current listeners on those digital offerings. Right now, that doesn't appear to be happening in any meaningful way.

In the next post, a possible template for the promotion of digital listening.

The Well-Chosen Word Matters in Pledge Drives Too

noreply@blogger.com (RadioSutton) — Wed, 22 Apr 2015 14:40:00 +0000

One of the big challenges during public radio pledge drives is avoiding clichés. They pop into the appeals of even the most experienced on-air pitchers. Fundraising fatigue will do that to you.

Pledge drive clichés aren’t effective at persuading listeners that their support is important.

You are the public in public radio.

And it is unlikely a cliché ever motivated someone to drop what she was doing to make a contribution.

We meet our goal one pledge at a time. Just you and 19 other people in the next 2 minutes gets us there.

For the most part, pledge drive clichés are silly filler. However, there’s a new one going around that is downright ridiculous and, in my opinion, a bit damaging.

It’s time to begin your financial relationship with the station.

When I hear this on the air, I can’t help but think about how Paula Poundstone might react using her best “Wait Wait… let’s stop the show for a moment while I ask a few questions to sort this out” voice. It goes something like this:

Hold on a second. Did you say that you want to begin a financial relationship with me? How does that work? I give you 10 bucks a month and you go halfsies with me on my kid's college tuition?

On-air fundraising is hard. In some ways it is the most challenging programming to produce in public radio because it is live and, even when heavily scripted, subject to spontaneity.

Sometimes that spontaneity makes the fundraising more effective. Other times it undermines not only the fundraising, but also the larger effort to build a true relationship with listeners beyond the programming.

It’s time to begin your financial relationship with the station.

Who talks like that in real life?

Public radio is successful because the well-chosen word still matters. Listeners will hear poorly-chosen words on-air as long as stations do traditional pledge drives. It's one of the costs of doing business that way.

It’s important to remember that the pledge drive words are just as much a part of how listeners think and feel about the station as the words they hear while listening to programming. Stations should strive to recognize those poorly-chosen words when they inevitably happen and ensure that they don’t become clichés that hurt the station’s image more than they help it.

Shorter Pledge Drives... Again!

noreply@blogger.com (RadioSutton) — Tue, 21 Apr 2015 15:59:00 +0000

Public radio is in another cycle of conducting shorter on-air pledge drives.

The latest cycle started at North Country Public Radio (NCPR) in upstate New York. Last fall, NCPR produced what it called a Warp Drive, allowing it to meet its $325,000 campaign goal with just 3 hours of traditional on-air fundraising. The typical NCPR drive was five days full of fundraising interruptions.

NCPR achieved this through weeks of more aggressive off-air fundraising (email, direct mail, social media) supported by short on-air announcements that didn’t interrupt the programming. Several stations have followed NCPR’s lead and have been able to cut their drives from more than a week to mere days, even hours. Vermont Public Radio managed to meet its $350,000 goal without having to interrupt programming at all.

The “less on-air fundraising” movement isn’t new to public radio. There was a lot of experimentation in the mid-1990s. We helped WBUR in Boston cut a drive from 10 days to 3 hours with More News, Less On-air Fundraising. The station managed to keep drives very short for a little more than a year. WKSU in Kent, OH pioneered All the Money in Half the Time. Many stations tried variations of these ideas throughout the 90s with good results.

In the early 2000s, WUWM in Milwaukee eliminated its entire Fall drive for 3 or 4 years in a row using strategies similar to NCPR’s Warp Drive. Around the same time, WSKG in Binghamton, NY invented the 1-Day pledge drive.

Sonja Lee, who is part of our firm Sutton & Lee, helped perfect the 1-Day drive concept while she was at KBBI in Homer, AK. She helped us create a 1-Day drive kit and consulting package used by more than a dozen stations. A few of those stations have been doing nothing but 1-Day pledge drives for years, including five straight years for Northwest Public Radio in Pullman, WA.

Shorter drives, by themselves, provide no long-term fundraising benefit. The real fundraising benefit of shortening drives is the leverage it provides when trying to get more sustaining members and direct mail givers. These types of donors have greater long-term value to the station. The promise of shortening or eliminating drives helps change their giving behavior.

It should come as no surprise then that drive shortening efforts tend to work best at stations with under-developed off-air fundraising programs. There’s more financial opportunity.

Really short drives don’t last long at most stations. There are several reasons including:

- Failing to upgrade off-air fundraising efforts or maintain them at the highest level. After a few big successes, pledge drives get longer again in order to capture lapsed donors and lost off-air revenue.

- Increased revenue demands. Stations increase their spending over time more than they can improve their off-air fundraising results. Then the pledge drive creep begins.

- Novelty. Short drives are at their most efficient the first go-around. The actual on-air part of shorter drives make less money over time as listeners get used to them. The first few drives bring in lots of additional gifts as current members reward the station for doing less fundraising. The novelty wears off and the additional gifts go away.

This is where NCPR has made an important innovation. Almost every past approach to less on-air fundraising had a "pre-drive" that helped shorten the drive. NCPR flips that and says that the weeks leading up to the on-air pitching *are* the drive. The on-air part is merely clean-up. That's a very good message. It redefines the drive and might help create future additional gift opportunities when the novelty wears off. Whether that pans out remains to be seen.

Acquiring new members can be an issue over time but it is not initially a problem for most stations. At first, stations sees a spike in renewal rates and lapsed donors coming back. So even when new member counts are down, the donor database grows through better retention and reacquisition. This can last as long as two or three years if the off-air fundraising efforts are firing on all cylinders.

Will this cycle of shorter drives lead to a lasting change in how public radio conducts on-air fundraising? Probably not.

NCPR repeated its Warp Drive approach this Spring and needed 2.5 days of traditional fundraising to meet its campaign goal. While that’s a lot more than the 3 hours it required in the Fall, it is still a great success. It’s half as much fundraising as the station used to do. That’s good fundraising and good stewardship of the airwaves.

And, as with every past cycle to shorten drives, this one is helping public radio learn new things about fundraising that will make more stations stronger in a future where traditional pledge drives could be as much of a liability as an asset.

The Impact of Sustaining Givers on Public Radio Fund Drives

noreply@blogger.com (RadioSutton) — Tue, 17 Feb 2015 20:34:00 +0000

The movement to monthly sustaining givers has been good for many public radio stations, improving annual donor retention and monthly cash flow. The impact on fund drives is less clear.

There's not a lot of readily available national data on the subject, but we've seen mixed results across a few dozen client stations over the past three years. It appears the increase in sustaining members has reduced fund drive efficiencies for two reasons.

The pool of donors who might renew their membership during the drive is smaller because many of the most loyal donors are now sustainers. And additional gifts are a tougher sell since part of the sustainer pitch is that the listener is already supporting the station every month.

These two issues seem to have a greater effect on stations that ran efficient fundraising programs prior to seeking sustaining members. Stations that were less efficient to begin with get a longer grace period before their on-air drives are affected.

Perhaps a bigger issue now facing many stations is the multi-year impact of sustainer programs on fund drive cash flow. Every station has to manage the initial cash flow hit of starting a sustainer program. That's because the pledges that used to fulfill all at once now take 12 months to fulfill. The later in the fiscal year a sustainer is acquired, the less cash flow value that listener has in the current fiscal year.

In theory, the station is trading short-term fund drive cash for ongoing monthly sustainer cash. In practice, we are seeing stations trying to increase both. As a result, fund drive cash flow expectations are no longer being adjusted proportionately to sustainer pledges received during the drive. Drive goals are going up in a more difficult fundraising environment.

Here’s an example using a station with a drive goal of $300,000 in pledged dollars. Sorry about all of the numbers.

Prior to its sustainer program the station could count on $270,000 or more of that $300,000 to fulfill in the fiscal year. With a sustainer program, at least $100,000 of the pledged dollars are now being paid monthly (1/3 of pledged dollars).

If that drive occurs halfway through the fiscal year, then only half of the sustainer money fulfills in the fiscal year. That’s a $50,000 hit to fiscal year cash flow. Now only $220,000 fulfills in the fiscal year. Over three drives, on-air fundraising contributes $100,000 less per year to cash flow.

What we’re starting to see is that after the initial implementation of a sustainer program, stations aren’t willing to take that big of a cash flow hit on the fund drive revenue line. Rising budgets keep putting pressure on fund drives to deliver more immediate cash. So fund drive cash flow expectations are no longer being reduced deeply enough to account for sustainers. In some cases cash flow goals are approaching the same levels as the pre-sustainer drives.

The consequence is that the station has to raise its overall fund drive goal to meet the cash flow projection for the drive. Going back to our example, to raise $270,000 in current fiscal year cash with the sustainer model, the drive goal now has to be $380,000. That’s 27% higher than the pre-sustainer model. In a tougher on-air fundraising environment.

As a rule of thumb, the more successful a station is with sustainers, the less reliant it must become on fund drives for cash flow. It also must become better at multi-year, multi-channel revenue planning. If it doesn’t, then drive goals must be increased with the understanding that getting more immediate cash out of a drive and getting more sustainers from that drive are conflicting goals.

The problem, as we are seeing it, is that an increasing number of stations want both and that's not working.

A few decades ago, when public radio was investing considerable resources in on-air fundraising research and training, I posed the question, "Pledge drive or Fund drive?” That is - is the main purpose of this drive to get donors or money? It is an important question that impacts fund drive strategy, tactics, and messaging.

It turns out that public radio's incredible audience growth over those decades made that question less important than we thought. Most stations picked raising money as their primary goal and got enough new members along the way to grow, even though the percentage of new member donations was quite low.*

The success of sustainer programs and the importance of acquiring sustainers through on-air drives just might be making "Pledge drive or Fund drive?" a more relevant question today.

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* New givers in most fund drives range from 25% to 35%. It has been that way for a few decades. Flip that number around and it means that 65% to 75% of givers during an on-air fund drive are already in the station’s donor database. These percentages are a result of focusing on raising money during drives over acquiring new givers.

It’s Taking More Leverage to Generate Pledge Drive Contributions

noreply@blogger.com (RadioSutton) — Thu, 12 Feb 2015 18:00:00 +0000

Our last post covered how it is getting more difficult to generate contributions during public radio pledge drives. We introduced the idea of public radio pledge drive Leverage. (Pleverage?)

Leverage is the weight of the incentives offered to generate a contribution or to raise a dollar. Leverage is the stuff – premiums, challenge grants, dollar-for-dollar matches, sweepstakes – offered during the drive to spike response rates and influence average gift.

We’re still working on the best way to measure this, but it is an important concept. On one hand, incentives are a cost to the station – financial and in terms of listener perception. We know from Listener-Focused Fundraising research that commercial-like fundraising tactics create negative perceptions among many listeners and that is a cost.

On the other hand, incentives create an important value proposition for an significant subset of potential givers. This post focuses on the idea of value proposition.

But Wait There’s More!

It used to be that using one incentive at a time was sufficient leverage to meet hourly and daily on-air drive goals. Sometimes two incentives, such as a premium and a dollar-for-dollar match were offered simultaneously. Now, more stations are offering more stuff, simultaneously, to meet their goals.

The questions before us are how much leverage is really necessary for a station to get the results it needs? And, is there a point where so much leverage is needed to meet the pledge drive goal that it is a sign of an unrealistic goal?

In the interest of full disclosure our company, Sutton & Lee, provides on-air fundraising consulting services to nearly a dozen public radio stations. We are helping many of those stations use increased leverage to meet their goals.

Below is an example of what one major market station offered as sweepstakes prizes during a recent campaign. The example below is not one of our client stations but it represents how a handful of stations have been operating over the past decade and we think it represents where much of the industry is headed.

Trip for two to Paris

Tanzanian Safari for two

Trip to Iceland

WWDTM Trip to Chicago

Galapagos trip

Rome and Florence trip

Mercedes Benz

That’s something like $60,000 to $70,000 of prize incentives for just one pledge drive. The station also had several challenges and dollar-for-dollar matches ranging from $10,000 to $50,000. Additionally, a few premiums were set at “loss-leader” pledge levels to boost response rates.

Depending on when a listener was asked, the enticement to respond during this drive would have been entry into sweepstakes for multiple trips, a chance to win a Mercedes, a $50,000 challenge grant, and an attractively priced premium.

The value proposition to the listener is this:

“Give $10 per month now to get a great thank you gift at a special pledge level and also support the station you depend on so you can maintain access to your favorite programs. You’ll also get many chances to win a dream vacation and a chance to win a luxury car all while turning that $10 per month into a $50,000 challenge grant the station can earn if you do it by the end of the hour.”

While this might seem extreme to the outside observer, leaders at this station obviously felt all of these incentives were needed to meet the goal over their planned fundraising footprint. That’s a lot of leverage.

And this station is not alone. Many stations are giving away multiple trips. Others are giving away cars and even tens of thousands of dollars in cash.

It’s Not a Bake Sale Anymore

And it’s not just the sweepstakes that are getting extreme. Some stations offer “early bird” discounts on premiums, where the pledge level starts low and goes up later in the drive. While very commercial sounding, this technique does boost immediate response rates.

Some stations offer “two-for-one” matches where every dollar contributed generates two additional dollars in match money. To the listener this is, “give $100 right now and the station receives an extra $200 donation from a generous major donor to the station. Right now your pledge has three times the buying power.”

These two-for-one matches can be very effective at generating immediate response. They are often four times more effective than incentive-free fundraising at generating contributions and dollars.

The value proposition of matches is also quite good from the listener perspective. Unlike a sweepstakes, which the listener may or may not win, there is an instant benefit to responding. The listener gives and the station gets even more. Instantly!

The primary downside of two-for-one matches for the station is that a dollar of leverage returns just 50 cents in revenue. The pledges come in faster, which is good, but the cash return on the leverage is lower than the value proposition to the listener.

We’ve seen stations raise less money in an entire day than they used for a two-for-one match during that day. For example, $30,000 in match money generates $15,000 in contributions over a few hours. Then the rest of the day generates $10,000 in pledges. The daily pledge total is $25,000 but it took $30,000 in match money to get it.

It’s a reasonable argument to point out that the any match or challenge in a pledge drive is worthwhile because the station leveraged the pledge drive to obtain the match money commitment in the first place. We agree. That’s one of the great strategic benefits of matches and challenges. They raise money twice for the station, once before the drive and once during the drive.

But from the potential donor’s perspective a two-for-one match is the antepenultimate pledge drive offer. It’s big leverage. The only thing that makes it better is getting a discounted premium and a chance to win a great sweepstakes prize while getting your gift tripled.

Circling back to the big question in front of us, “how much leverage is too much?”

Are we at the point where meeting goals requires offering incentives worth more than the value of the contribution itself? Is there an ideal ratio of pledge drive dollars to incentive value.

Defining leverage in this way could help underperforming stations get better results or at least better manage their expectations. It could also help stations efficiently meet their goals without going overboard.

Another benefit is improved pledge drive benchmarking. It’s almost impossible to compare results across stations without considering the leverage applied at each station.

Finally, we can’t leave this discussion without asking if there is a point where greater reliance on commercial tactics makes pledge drives even less-listenable and/or erodes the bond between the station and listeners who value the non-commercial nature of public radio.

Difficult Pledge Drive Days Ahead?

noreply@blogger.com (RadioSutton) — Tue, 03 Feb 2015 02:52:00 +0000

It’s getting harder to generate contributions through public radio pledge drives. Most stations are still getting good overall results, but the cost of getting those results is going up.

Sometimes the cost is more on-air fundraising. It is taking more of the station’s time and more of the listeners’ time to generate a contribution. Sometimes the cost is greater leverage. That is – stations are having to offer more, or more expensive, incentives to generate a contribution.

Probable Causes

Success with monthly Sustaining givers appears to be having an effect on drives by cutting into the potential number of annual renewals received during the drive. Declining AQH (Average Quarter-Hour) audience is another possible cause. Lower AQH means listeners are using the station less. That could result in listeners being less likely to give. It certainly reduces the number of potential respondents to an on-air fundraising appeal.

There could be external factors as well. People are being asked to immediately part with their money at unprecedented rates these days. The junk mail and telemarketing calls of 25 years ago now follow us out of our homes and find us 24/7. The amount of daily asks is numbing. Public radio pledge drives appeals are fighting through much more clutter just to be considered let alone acted upon.

Measuring Pledge Drive Success

The primary metric we use to measure on-air fundraising success is Listener-Hours to Generate a Contribution. Using Nielsen Audio audience data, we answer the question, “how many hours of listening must we expose to fundraising to get someone to give?”

Or, put another way, how efficiently are we spending our listeners’ time to get a single contribution? A lower number is better. The goal is to maximize the pledge drive return against the expense of the disrupting the listening experience.

In a PPM-measured market, an efficient pledge drive for an NPR News station generates one contribution for every 300 hours of listening exposed to fundraising. That’s like putting 300 people in an auditorium and playing public radio content for an hour, except that their experience will be interrupted 4 to 5 times in that hour with 4 to 6 minute fundraising appeals. At the end of that hour, one of the 300 people will make a contribution in the amount of an average gift.

Two Trends

We see on-air fundraising following two trends. Some stations are adding more fundraising hours and exposing more listening to pledge drives to meet their goals. The fundraising efficiency metrics at these stations don’t improve, they get worse. The stations still meet their goals, or come relatively close, by applying more brute force.

The other trend involves applying more Leverage to the fundraising ask. We haven’t settled on exactly how to best measure Leverage, but we believe the broader concept is sound. For now, consider the Leverage to be the weight of the incentives offered to generate a contribution or to raise a dollar.

Here’s an example. Ten years ago a station offers a dollar-for-dollar match and the fundraising efficiency is 150 Listener-Hours (LH) per Contribution. That means the match is twice as efficient as the average hour of fundraising, which took twice as many LHs (300) to generate a contribution.

Today that match has an efficiency of 200 LHs per Contribution. It’s less efficient at turning listening in to contributions. So the station decides to offer a free tote-bag to anyone who gives during the match in addition to any other thank you gift they take. More listeners respond to the offer and the efficiency returns to its prior number of 150. The station achieved its prior efficiency by applying more Leverage.

This is happening at a lot of stations across the country stations. They are offering more incentives each drive and offering more of them simultaneously to maintain fundraising efficiencies.

Is the Problem Too Much Talk About Stuff and Not Enough Talk About Mission?

Probably not.

Mission messages are great for convincing listeners that they should give to the station but they aren’t particularly effective at motivating people to actually pause their busy lives to give at that moment. The well-executed “Mission” focused fundraising hours tend to fall in the 400-500 LH efficiency range.

A pure Mission approach to pledge drives would likely require a plan that exposed listeners to 33% to 50% more fundraising to meet the overall drive goal. That’s like turning a 9-day pledge drive into a 12 to 14-day pledge drive. As you might imagine, longer drives tend to drive efficiencies down even more.

What’s Next?

Subsequent postings on this topic will go a little deeper into Leverage, Sustainers, and off-air fundraising including the use of email, social media and database solutions.

One final note. In the past we’ve observed that public radio might have more of a spending problem than a fundraising problem. The money stations are spending on increased local news offerings and digital initiatives is outpacing their ability to monetize those activities. They are currently money losers. That puts pressure on the core radio service to generate “profits” to subsidize those activities.

One of the possible answers to slipping pledge drive efficiencies is to reduce the revenue burden they must bear through smarter spending on local news and digital.

Audience 98: Enduring Insights or Now Useless Information?

noreply@blogger.com (RadioSutton) — Fri, 21 Nov 2014 23:44:00 +0000

Yesterday's keynote speech at the Public Radio Super Regional meeting was by Paul Jacobs. He's a radio researcher, radio web app developer, and the incoming Board Chair of Greater Public -- the trade association for fundraising, development, and marketing professionals in public radio and public TV.

Early in his speech, Jacobs took exception to public radio's continued use of findings from a major industry research study published in the late 1990s -- Audience 98.

Jacob's criticism was that the research was conducted in 1998. He accentuated that point with a pretty funny set of images of products and services from 1998 that are no longer with us... like Windows 98.

That was it. Audience 98 is old and therefore no longer of value. "Get over it," he said.

It made for a good laugh. But it also got me to revisit my thinking about Audience 98 and whether its findings could help public radio grow and thrive in this never-ending age of digital disruption. I think the answer is "yes." And, instead of getting over it, I'm thinking perhaps more people need to get into it.

In the interest of full disclosure, I worked on the Audience 98 research and I contributed to several Audience 98 reports. After careful consideration of any bias I might have towards my past work, I still think the answer is "yes."

That's because 16 years later, we continue to successfully apply the lessons learned from Audience 98 in our consulting work with public radio stations and producers. Audience 98 has become especially valuable as we work with people new to public radio who don't know much about the audience and the intersection of listening, values, and giving. It's amazing to see what they can accomplish in radio, in the digital space, and in fundraising once they have that understanding.

Why has Audience 98 endured?

I believe it is because Audience 98 wasn't really a radio research project. It was a research-based blue print for increasing public radio's public service and long-term financial self-sufficiency. Unlike commercial radio research, which is generally designed to help boost the immediate ratings and is expected to have a short shelf life, Audience 98 was designed to provide insights that would stand the test of time.

What do you think?

Below are a few of the essential insights from Audience 98. Each insight is backed by very specific, actionable research findings to help public radio get more listeners, more listening, and increased financial support from listeners.

I encourage you to spend some time with each of these insights. Ask yourself, "Are these lessons stuck in 1998?" "Are they limited to radio only or could they apply to listening via mobile devices and the desktop?" "Could they apply to public radio generated content that people might read on a mobile device or the desktop?" "What new information could make them even more valuable to the decisions public radio leaders face today?"

Public radio transcends simple demographics to speak to listeners’ interests, values, and beliefs.

People listen to public radio programming because it resonates with their interests, values, and beliefs. This appeal generally cuts across age, sex and race.
Appeal can also cut across program genres and format types. Different programs and formats may appeal to the same kind of listener as long as they stay focused on that listener’s interests, values, and beliefs.
Changes in the sound and sensibility of programming can alter its appeal. When programming appeal changes, so does the kind of listener it attracts.

Public service begets public support.

Listeners send money to public radio when they rely upon its service and consider it important in their lives.
They are also more inclined to send money when they believe their support is essential and government and institutional funding is minimal.
Public support, like public service, is the product of two factors: the value listeners place on the programming, and the amount of listening done to the programming.

What's your opinion? Are you over it or into it? Here's the link to the source material and the entire Audience 98 series of reports if you want more.

Is Local News the New Classical Music?

noreply@blogger.com (RadioSutton) — Wed, 19 Nov 2014 18:07:00 +0000

Digital News Guru Ken Doctor presented the opening session today at the public radio Super-Regional meeting in Las Vegas.

His premise. Local news presents a great opportunity for public radio.

His logic. There is great potential in the digital space for national news. Jobs are growing in this sector. There's more than $40 billion in digital advertising out there. And local news in trouble. Revenues are way down. More than 20,000 jobs have been lost. There is a dearth of local reporting and this represents opportunity for public media.

This is the same logic that was used to program public radio in the late 1970s and early 1980s. Public radio was the place to program dying formats.

The problem, as public radio learned by the late 1980s, is that picking up the failed scraps from commercial media does not make for a viable business model.

We often forget that the success public radio has enjoyed over the past several decades came from inventing something new -- a national news, information, and entertainment service delivered locally that created a non-geographic sense of community among like-minded listeners. Public radio built a great multi-stream revenue model on this service. It is the same model being pursued by the start-ups in the national digital new business.

Focusing on local to the detriment of national is to abandon what has made the public radio business model work.

So what does this have to do with classical music?

There has been somewhat of a classical music radio revival in major markets of late. Stations such as WQXR in New York, KING in Seattle, and KDFC in San Francisco flipped from commercial radio to public radio with great success.

These markets are sufficiently large to accommodate the financial needs of classical music radio stations. But most markets are not. That's why they import their classical from syndicated services.

More important, these are brands committed to classical music full-time. They succeed because of their singular focus, their singular appeal.

News is not the singular appeal of public radio. National and local news can have very different appeals.

This valuable lesson, first learned in the 1980s, still applies today. Putting too much local content into today’s service is the same problem as trying to have NPR News, Classical, Jazz, Folk, and 8 others types of programming on a single station. It works against the principle of focusing formats based on the appeal of the content.

If there is a future in local news for public radio, it is establishing a separate service with a separate brand. It is inventing something new that stands on its own. Adding too much local to the current public radio station brand will diminish, not enhance, the brand.

Observations on NPR One

noreply@blogger.com (RadioSutton) — Tue, 16 Sep 2014 16:01:00 +0000

The slogan for the NPR One app is “Public Radio Made Personal. The purpose of the app is to help the user create a more customized listening experience. Stories can be skipped. A recommendation engine personalizes the line-up of offerings. The app draws on NPR’s most current news content, archival pieces, and content from local NPR stations.

NPR One is a good start for what it is trying to do and it will get better. Here are a few early observations about its potential impact on NPR and NPR News stations.

Sonic Station Branding Needs to Improve – a Lot

When it comes to cobranding, NPR News stations fare better in NPR One than in any of NPR’s previous digital audio efforts. An NPR One listening session begins with an NPR/Station cobranded audio ID. Local station newscasts and stories appear throughout listening sessions. Occasionally, there is a second NPR/Station cobranded audio ID, but there is nowhere close to the amount of NPR/Station cobranding listeners hear when using the radio.

That sonic cobranding over the past three decades was an integral part of building the NPR brand and strong station brands. That sonic cobranding is still needed today to maintain strong station brands. It is probably the single most important element of helping stations of all sizes solidify their place in the digital media space.

This is extremely important given that NPR is prohibited by policy from raising money directly from listeners. In order to protect the existing listener-support model, every listening session in the NPR One space has to have NPR/Station cobranding that is as good, or better, than what listeners have experienced over the past three decades. Stations have to get equal credit with NPR for creating quality listening experiences in the digital space or fundraising revenues will eventually drop.

No Sense of Place, No Sense of Time, Inconsistent Pacing

Sense of Place, Sense of Time, and Pacing are three vital aspects of the radio listening experience for many people, especially in the morning. The radio programming elements that create Sense of Place, Sense of Time, and Pacing – time, segment time posts, weather, local information, forward promotion, etc. – are absent from NPR One.

This will be perfectly fine for many NPR One listeners. Some will even embrace it and use NPR One exclusively. It could even be a substantial audience. But the absence of these elements will prevent NPR One from being a “radio killing” app.

The more likely scenario is that NPR One will share substantial audiences with NPR News stations. These shared audiences will want varied listening experiences. It’s not difficult to imagine someone listening to an NPR station live via stream or over the air in morning and afternoon drive and then using NPR One to customize their listening experience during other dayparts. This is something worth testing within the NPR One app, including testing “live now” promotion of key interviews on national and local talk shows.

Weaker Branding of NPR Programs and NPR Hosts

NPR One is creating a bit of a branding mess for NPR's hosts and programs. I’ve heard NPR’s Steve Inskeep, David Greene, Melissa Block, and Scott Simon all introducing stories within the same listening session. It is sometimes difficult to sense who the host is supposed to be. Likewise, the names of multiple NPR programs can appear within the same listening session.

In its current state, the NPR One App transcends the NPR’s major sub-brands such as Morning Edition and All Things Considered. That might just be one of the inevitable side effects of personalizing the listening experience. The source programs of content could end up being irrelevant in NPR One and the role of the programs hosts could be more correspondent-like than host-like.

Pre-Atomization of Content

Atomizing content is curating it in a way that extends its shelf life and makes it easier to discover and consume in the digital space. It is my understanding that a lot of NPR News content is currently atomized after it is presented on the newsmagazines. That’s why, when listening to NPR content on demand, you can still hear a program outcue at the end of an interview or a reference to “this morning” when a host introduces a story. Those are elements of good radio programming that are unnecessary, and even problematic, in the NPR One space.

Expect this to change. Expect more of what you hear in Morning Edition and All Things Considered to be pre-atomized; to be produced to be NPR One-ready without as much editing work on the back end. Will it change the way NPR’s newsmagazines sound on the radio? Probably. Will pre-atomization of content hurt the audience performance of Morning Edition and All Things Considered? We don’t know. Maybe it could help.

Maybe the pre-atomization of NPR content will create new branding opportunities for stations around NPR’s flagship programs. Presently, stations face challenges establishing their own brand in the NPR News programs without excising elements of the NPR brand. A more atomized Morning Edition or All Things Considered just might be the best approach to helping stations create stronger local brands without running away from their NPR identity. More on that in a future posting.

The Increasing Importance of Station Branding in the Digital Space

noreply@blogger.com (RadioSutton) — Tue, 09 Sep 2014 00:46:00 +0000

Well, the blog unintentionally ended up on hiatus for almost 10 months as I launched Emodus Research to study the emotional connections public radio listeners have with NPR and with their stations.

That research is yielding some fascinating insights. Even the process of planning and evaluating that research has uncovered, for me at least, the increasing importance of branding in public radio, particularly when it comes to digital listening and listener support.

I covered some of this in an article published at Current.org about NPR stations staying relevant in the digital age.

We know that station audiences will fragment as more listening options become available. In our research, we're trying to figure how much audience stations might gain, keep, or lose along the way and how valuable those listeners are to a station's membership fundraising.

Here are some of the issues that have surfaced as we consider the implications of this fragmentation.

1. It is well-established that listening to public radio leads to giving to public radio. In that past, all of that listening was station-branded to some degree. Today, an increasing amount of public radio listening is going to digital brands, particularly NPR, that cannot monetize that listening through individual giving.

2. Based on industry benchmarks, every 1,000,000 hours of listening that shifts from stations to NPR has the potential of costing public radio 250 givers and $30,000 in gross membership contributions.

For perspective, it takes 200,000 people listening 5 hours per week to generate 1,000,000 hours of listening.

So 200,000 people switching from station-branded listening to NPR-only listening for an entire year (a loss of 52,000,000 hours) could cost public radio 13,000 current or future givers and just over $1.5 million.

Downloads of NPR apps are in the millions. There is a huge financial downside to shifting existing and generating new listening to NPR platforms that are not strongly co-branded with stations.

3. Failure to convert NPR-direct listening into listener contributions -- at the station or national level -- risks making NPR more dependent on corporate support as stations' ability to pay for NPR declines. Corporate support will likely have to be NPR's fastest growing income segment to keep up with expenses.

Neither the public nor NPR stations will benefit from an NPR that must put corporate support first to survive, but we see that already beginning to happen. The pressure to create new corporate sponsorship opportunities is great. It has strongly influenced the discussion around how NPR News programs are structured (program clocks), the development of digital offerings, and the drive to promise sponsors prime adjacencies to content that puts their sponsorship in a favorable context.

Let's bring this back to branding. By policy, NPR cannot raise money directly from listeners. It has no meaningful way to generate listener revenue from NPR-only digital listening. It stands to reason then that NPR would want to cobrand every single NPR digital listening occasion with an NPR station.

That branding has to be as good or better than it is today so listeners understand that the station is a key provider of their listening experiences. Anything short of that will cost public radio givers and membership revenue. Yet today, even with NPR One, digital cobranding isn't even close to what is heard on the radio.

More on that, and other NPR One thoughts, in the next post.

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Footnote: Here's one additional thought about audience fragmentation. It might hurt station underwriting income before it hurts membership income.

Our research is beginning to show that givers who put high value on Sense of Place and the station's local efforts are more financially valuable than listeners who perceive the station as a middle-man between them and NPR.

There's more research to be done, but an audience drop of 25% might not result in an equal drop in station membership revenue. However, a 25% drop in audience, particularly during the NPR News programs, might have an even larger impact on a station's ability to sell underwriting.

Does Public Radio Have a Leadership Inferiority Complex?

noreply@blogger.com (RadioSutton) — Fri, 13 Dec 2013 23:19:00 +0000

One of the more perplexing situations in public radio is the failure of NPR to find and develop strong executive leadership from within the public radio system. It appears that that is unlikely to change as the NPR Board selects its next CEO.

NPR has hired a headhunting firm that specializes in recruiting for technology companies. Headhunting firms are typically hired for their knowledge of a field. It’s not unreasonable to assume that the NPR Board believes its next CEO will not come from the station ranks.

On top of that, several sources close to the NPR board tell us that the current and past CEO search committees have taken the position that no one in public radio is qualified to manage the external relationships NPR must forge to succeed in the digital age. I hope that’s not that case. It is a weak starting position for a search given the difficulty recent CEO’s have had managing the internal relationships NPR must repair to succeed in the digital age.

The NPR-Member Station relationship is the foundation of NPR’s business model. It is widely understood these days that the NPR-Member Station relationship, and consequently, the NPR business model are in great need of repair. Yet the vision, skills, and experience to affect those repairs don’t appear to be part of the hiring criteria for NPR’s new CEO.

It is unlikely that a headhunting firm will find those skills in the tech world. Wikimedia CEO Sue Gardner lamented in her recent speech at the Public Radio Programming Conference that Silicon Valley isn’t funding start-ups with public service in mind. It’s all about profit. So viewing NPR’s leadership needs through a technology lens could make it doubly difficult to find someone who can be the keeper of the industry’s public service flame and cultivate healing relationships with Member Stations.

Meanwhile, across the country, there are many stations that have built strong local radio services while developing original content and improving public service, marketing, and engagement through new digital technologies. And not all of them are in large markets.

Leaders at these stations are forging the kinds of external relationships an NPR CEO would be expected to develop. They’ve proven quite capable of getting in front of foundations, major donors, and potential business partners and articulating the current value of public radio as well as a compelling vision for the future. They’ve proven quite capable of raising money in a difficult fundraising environment. They’ve proven quite capable of managing complex budgets, handling challenging business relationships and decisions, and managing large, diverse staffs. They know how to develop original content. Many have experience as national program producers and distributors. And they are quite knowledgeable about the difficult audience and revenue issues facing NPR and it Member Stations.

There are many station leaders who have helped build public radio into the success it is today. Much of that success has come in the digital age. But for some reason, past NPR search committees have deemed that success insufficient for leading NPR.

This sets up an interesting dichotomy. NPR’s Board searches for leaders who want to build on public radio’s great success, but does not think the leaders who are very much responsible for creating that success are good enough for the job.

It’s as if public radio has an inferiority complex; that the incredible success of public radio stations is somehow inferior to the success of other leading businesses and non-profits. Why? Perhaps they believe it is because of NPR programming; that the qualities of great station leaders are diminished because they have the benefit of NPR content. Or perhaps they believe that station accomplishments are less meaningful because they are in radio and not some other field, like television or newspapers or digital. That couldn’t be further from the truth.

NPR and public radio stations, together, have built a significant public service, one that has enjoyed exceptional growth as newspapers and Public TV have been in decline. The public radio system is widely admired for its contributions to improving society, its editorial and business integrity, and its current revenue model. This didn’t happen by accident and it isn’t just because of NPR programming.

Until satellite radio, there was no such thing as a national audience to an NPR program. The national audience for NPR News was exclusively an aggregation of audiences to local stations. Most of the growth that NPR claims for its programs over the past few decades is really the growth of local station audiences. And today that aggregation remains, by far, the most significant source of listeners to NPR.

That audience success, the success so admired by the outside leaders who aspire to win the NPR CEO job, is a product of leadership at local stations. Believe it or not, it is easy to mess up an NPR News station. It happens all the time. Audience success at top performing stations is a result of acumen and intent beyond scheduling NPR programs at the best times of day.

The same holds true for membership fundraising, major giving, underwriting sales, and creating value in the digital space. The best stations in each of these areas are successful because of strong leadership, innovation, and a commitment to being, and staying, the best. Those leaders are at the foundation of any success that NPR can claim for itself. There’s no NPR success story today without strong station leadership over several decades.

It is fallacy to assume that success leading a growing public radio station can’t translate into success leading NPR. And given the failure of NPR’s last few CEOs to address the core problems harming the NPR-Member station relationship, it is fair to question whether hiring outside of public radio again will get a different result, especially if the new CEO lacks a strong public service background.

Any new hire to the position is going to have to grow into some parts of the job. NPR’s recent CEO failures raise the legitimate possibility that a highly qualified station manager has a better chance of growing into the external CEO role than an external candidate has of growing into a successful public radio system leader.

There are several highly qualified individuals in public radio for the NPR CEO position. When it comes to recruiting potential candidates, their success should count more because it is in public radio, not less.

Transition for NPR Highlights Major Industry Issues - Part 2: The NPR-Member Station Relationship

noreply@blogger.com (RadioSutton) — Fri, 04 Oct 2013 15:28:00 +0000

A recent article at Current.org highlighted some of the financial and membership issues facing NPR as it looks for its next leader. Our last post considered the financial side. This post considers the membership issues.

Current reported on NPR's recent customer satisfaction survey among member stations. NPR scored well when it came to representing stations on regulatory, legislative and legal matters.  NPR received very low satisfaction scores on engagement with member stations.

It's no secret that stations have felt for many years that NPR hasn't been looking out for their best interests. The surprise here is the depth of dissatisfaction.  NPR was hoping to score 7.5 out of 10 on the engagement portion of the survey -- that is, NPR aspired to a "C+" average -- and it scored a 5.9. On attentiveness to small stations, NPR scored 5.1 out of 10.

The low customer satisfaction scores are an especially big deal because NPR's Board is controlled by member stations. Also worth noting is that the past three NPR Board Chairs have come from medium-sized stations, not large stations.

There's a long history of tension between NPR and stations over financial, audience service, and governance issues. That tension has grown in recent years as NPR's digital efforts allow more listeners to get content directly from NPR. This "bypass" is a scary proposition for NPR member stations and most stations view their control of NPR's board as the last line of protection against NPR grabbing their listeners and donors.

The thing is -- it's not working at that well. Stations can wield their governance power to prevent NPR from doing some things but they can't seem to use it to get NPR to act in their best interests. The recent satisfaction survey is evidence of that. Member stations control the Board. Through their votes they control which station managers sit on the Board,. Yet with all of this control at the top, NPR still gets an "F" on customer satisfaction among member stations. Station control of the Board isn't translating into a better NPR-Member Station relationship.

So where's the disconnect?  It's easy to blame the executives in charge at NPR but perhaps the issue still rests at the Board level. Here are two factors to consider.

First, NPR's Mission and Vision statement doesn't embrace helping member stations succeed. Even though NPR is a membership organization, the Board has not charged the executive leadership with serving member stations.  The mission statement says NPR partners with member stations. It says NPR represents the member stations in matters of mutual interest.  But it is silent about NPR acting in ways to help stations succeed.

The second factor, and this is probably linked to the Mission/Vision statement, is the role of the CEO/President.  Recently, the NPR Board has taken to hiring leaders of NPR but not leaders of the NPR membership, and certainly not leaders of the public radio system. That has to change if the NPR Board wants to repair relationships between NPR and its member stations.

More in our next posting.

Transition for NPR Highlights Major Industry Issues - Part 1: Financial

noreply@blogger.com (RadioSutton) — Thu, 03 Oct 2013 15:28:00 +0000

Current.org has a good read on some of the financial and membership issues facing NPR as it looks for its next leader.

On the financial side, Current reports that NPR had its best fundraising year ever in 2013, yet ended the year with a $3 million budget deficit. It was a remarkable comeback given that the project budget deficit was $6.1 million.

The lesson here is that public radio doesn't have a fundraising problem, it has a spending problem. This is not only true for NPR, it is also true for many public radio stations. Many stations are raising more money than ever, but struggling to make ends meet.  Additional investments in digital and local news aren't coming close to paying for themselves.

According to Mark Fuerst, who is leading the Public Media Futures Forums, this financial pressure is greatest on medium and smaller stations.  Revenues are growing for the largest 50 stations, but the smaller stations are struggling. That has to change soon or these stations will find themselves facing the same situation as NPR -- having to shed staff to make ends meet.

How does it change? Here are two necessary steps.

1.  Restructure how money changes hands in public radio. After salaries, national program acquisitions are typically the largest line item in a station's budget. The basis for those programming fees is an economic model rooted in 1990s media market dynamics not today's digital media marketplace. Restructuring the public radio's internal economic model could free up much needed resources for the smaller stations while ensuring that NPR and other national program producers have the resources needed to create high value programming, programming that generates loyal listeners and surplus revenues nationally and locally.

2.  Start applying financial success metrics to digital and local content efforts. Station managers need to know how much public service these activities really provide. They need to know if there are real returns in terms of public service provided and net revenues against direct expenses. They need to know how close these activities come to breaking even. And if they aren't at least breaking even, they need to know how much subsidization each activity requires. Having a handle on those metrics will help managers make smarter financial decisions whether there is a financial crunch or not.

In the next posting, thoughts on the troubled NPR-Member Station relationship.

Keep Hitting Listeners Right Between the Ears

noreply@blogger.com (RadioSutton) — Tue, 01 Oct 2013 17:35:00 +0000

Below is the original text from John Sutton’s acceptance speech after receiving the Don Otto Award from Audience Research Analysis and the Public Radio Program Directors association. You can hear the speech here. Just like live radio, what was written and what was said varied some.

It’s an honor to receive an award in the name of Don Otto, whose all-too brief career helped launch PRPD and professionalize the job of public radio program director.

The first time I met Don was in 1987 at one the PD Bee workshops he helped to organize. Those workshops were a critical beginning to the success and relevance public radio has today.

One of the key themes of those workshops was helping PDs understand what business they were in. Many thought they were in the “be all things to all people” business. Others thought they were in the museum business, that their stations existed as a place to preserve the failed programming of commercial radio. Polka anyone?

What program directors learned during the PD Bees was that they were in the public service business… more specifically… public service delivered via the ears. They learned that public service was NOT what they created… but what was consumed… what was heard.

Here we are, a quarter century later, and as an industry public radio is again questioning what business it is in. And by “business”I mean the activities that generate the money that pays the bills. The value proposition.

Is it the radio business? The journalism business? The content business. The public media business? Honestly, do listeners even know that that even means?

How about none of the above?

The significant service public radio provides, the market niche public radio owns, the one that keeps public radio in business is not radio. Radio is a technology. And it’s not journalism. There are hundreds of places to find good journalism.

No, the service that you deliver, the service listeners voluntarily support with money is helping people find meaningfulness and joy in life while they are doing other, mundane things.

It's not just the content. It's how and where the content gets to them, how it fits into their lives. That's what listeners support with their money.

Again, the business you’re in today is helping people find meaningfulness and joy in life while they are doing other, mundane things. And you are the best in the world at doing that.

I just started a new reserch company that measures the emotional connection public radio listeners have with NPR, and with their stations. Let me tell you two things we’ve learned and reaffirmed.

First, your listeners believe that the act of listening to public radio is part of doing something good for society. Think about that. For your audience listening is doing good for society.

Second, your listeners believe that listening to public radio makes them better people. You make them feel smarter. You contribute to their sense of happiness. You help them connect to people and ideas that enrich their lives.

You help people lead more meaningful personal and civic lives while they are doing the mundane -- shaving, dressing, making coffee, sitting in traffic.

You don’t occupy their time. You make the time they spend doing other things more valuable.

Sometimes you do that with journalism. Sometimes you do it with music. Sometimes you do it with entertainment.

That was the essential lesson Don Otto, and many others, were trying to help program directors learn in the 1980s. That lesson still applies today.

You’re not a hospice for dying radio formats or, for that matter, local journalism. And digital technology? It’s just that –technology -- another means to the end.

The end game is the same today as it was in the 1980s.

Keep hitting listeners right between the ears.

Keep getting better at turning the most mundane, routine activities into meaningful moments. And when you think you are good as you can be, find ways to be even better.

That was what Don Otto brought to public radio. It is an honor to receive this award in his name. Thank you.

Introducing Emodus Research and Sutton & Lee

noreply@blogger.com (RadioSutton) — Thu, 05 Sep 2013 14:34:00 +0000

A couple of business announcements as the RadioSutton blog returns from a few months off this summer.

1. Introducing Emodus Research, a new company created by John Sutton to help public radio professionals identify and leverage the emotional connections that drive listening, brand loyalty, brand advocacy, and giving. The initial service offerings from Emodus Research will be for public radio stations and program producers. Subsequent services will be available to public television.

2. John Sutton & Associates is now Sutton & Lee. Sonja Lee is now running the on-air fundraising side of things. John is still heavily involved in pledge drive planning and preparation. He also continues to help stations with strategic planning and Arbitron analysis.

Emodus Research

Question: In a world with smart phone apps and digitally-equipped cars, why would someone choose to listen to an NPR report from a public radio station when they could hear the exact same report at the exact same time directly from NPR?

Answer: Because he or she has a strong emotional connection to the station.

Question: What does a strong emotional connection look like?

Answer: We're finding that out now.

Emodus Research has already conducted several thousand on-line surveys with public radio, public television, online, and print news consumers across the country, with an emphasis on the public radio news listeners. We've researched the emotional connection NPR News listeners have with NPR and we're researching the emotional connection NPR News listeners have with their stations.

The results will identify the key emotional drivers that lead to increased listening, brand loyalty, brand advocacy, and giving.

Public radio stations will be able to identify specific actions they can take in programming, branding, marketing, social media, and fundraising to build emotional connections strong enough to keep listeners, advocates, and donors from leaving when NPR and other public radio alternatives are just as easy to hear.

You can learn more by visiting the Emodus Research website.

There's also an Emodus Research blog where you can follow our progress as we gain new insights about the relationship public radio has with its listeners and donors.

NPR, Its Member Stations, and Trust

noreply@blogger.com (RadioSutton) — Thu, 23 May 2013 16:49:00 +0000

Trust is a funny thing in public radio. The industry’s business model is built on listeners trusting what they hear on public radio and public radio trusting that listeners will voluntarily pay for content they get for free. It’s been a pretty good business model for the last several decades.

Yet within the industry there always seems to be a large measure of distrust between NPR and its member stations, the very entities that deliver the highly-trusted, highly-valued content to listeners.

We’ve been reminded of that distrust quite a bit since Current published our proposal for NPR to raise money directly fromlisteners. Everyone agrees NPR-direct fundraising would be effective. Some think the idea is great, in principle, but need more details on how it would work. Equal numbers disagree with the economic model we proposed and believe that effective fundraising for NPR would be disastrous for stations. Almost all questioned whether NPR could be trusted to act in the best interest of stations if given this fundraising power.

This level of distrust isn’t new. It existed in the early days of NPR, through decades of impressive audience and revenue growth, and into this age of digital disruption. That distrust existed, to different degrees, no matter who was sitting in the President’s office or who was second-in-command at NPR. That distrust has spanned a couple of generations of station managers.

Multiple trust-building efforts and exercises haven’t been able to exorcise the distrust. It is institutionalized.

Institutionalized distrust goes all the way back to the early 1980s and NPR’s financial crisis. It’s worth reading up on that crisis if you don’t know the story.* In short, the entire public radio business model was overhauled to save NPR from going under due to financial mismanagement and many stations backed a loan to as part of the NPR bailout.

Back then member stations had to vote on NPR’s budget every year, with board members and some station managers questioning line item expenses of just a few hundred dollars. NPR’s annual membership meetings were rancorous affairs that always ended with NPR getting budget increases and all parties leaving with bitter feelings.

There were also difficult battles over macro and micro programming issues, from a 4pm Eastern Time start for All Things Considered to giving stations more local cutaway opportunities in the newsmagazine program clocks. Every year stations were paying NPR more money but not getting the attention, respect, or services they felt were needed to grow. Seeds of distrust were sown.

Fast forward to today.

Most stations are paying NPR somewhere around 15% of their gross revenues for the rights to broadcast NPR programs. That’s the highest percentage in the history of the industry.
NPR now requires stations to pay for digital services whether they want those services or not.
NPR is now competing directly with its member stations for listeners.
NPR is now competing with stations for major donors.
NPR is experimenting with raising money directly from listeners for the first time.

To summarize, stations pay NPR a lot of money and NPR remains an obstacle and threat to station audience and revenue growth. Some things never change.

There have been times when the bonds of trust have been stronger than others. Sometimes those bonds were strengthened by people at NPR and at stations. Those bonds lasted only as long as the people lasted in their jobs, sometimes less than that. On a few occasions, those bonds were strengthened by new policies at NPR. Those bonds had more staying power.

One policy in particular was NPR’s decision to “lockdown” pricing for its news programs at a fixed percentage of total station revenues. That change in policy -- how money changed hands in public radio – went a long way towards improving the NPR/station relationship. It put an end to the battles over NPR’s budget and created a stable and predictable economic model that allowed NPR and stations to invest their money and energy into program and revenue growth.

The lesson – the bonds of trust between NPR and its member stations are just as much about policy as people, maybe even more so. A certain measure of trust can be institutionalized. Or perhaps more accurately, a certain measure of distrust can be prevented through good policy.

That’s going to be important in the next few years. Public radio continues to get severe warnings from experts inside and outside of public radio about the dangers of digital disruption. That disruption is already a source of increased distrust between NPR and stations. The disruption will only become more severe with time. Greater distrust will follow unless NPR and its board choose policies to minimize it.

One way to build trust is flip the public radio economic model on its head. NPR will never build sufficient trust with stations as long as it is charging stations more money than ever while actively taking listeners and donations away from those stations. Conversely, NPR could lay a strong foundation for trust by putting in place policies that put money in stations’ pockets and helps them grow audience.

We think our NPR fundraising proposal is a valid approach. We’ve also fielded several other ideas since our proposal was published. We will explore some of those in the coming weeks.

* Amazon link to "Listener Supported" by Jack Mitchell

Early Lessons from Planet Money’s Kickstarter Campaign

noreply@blogger.com (RadioSutton) — Tue, 07 May 2013 21:48:00 +0000

NPR’s Planet Money launched a Kickstarter campaign last week to help fund a story it wanted to produce on the life of a t-shirt. This is NPR’s first foray into direct listener fundraising.

As we wrote in previous postings and in a commentary for Current.org, we think NPR should be raising money directly from listeners but doing it in a manner that results in significant financial benefits for its member stations. The early lessons from Planet Money’s Kickstarter campaign demonstrate this is possible.

First, The Planet Money Kickstarter campaign has all of the traits of good fundraising. The core appeal ties back to the content and the value it creates for the potential giver, the “ask” is straightforward and empowers the giver make a difference, the gift amount is perceived to be affordable and still have impact, and it is easy to give.

Second, the campaign is going well. The outreach was modest by network standards and the goal was an even more modest $50,000. That goal was exceeded within the first 24 hours. In just under 8 days of a 14 day campaign, nearly 11,000 backers had contributed more than $311,000. These are pretty good results for relatively little effort.

Third, there’s how NPR handles its relationship with its member stations as it dips its toes in the forbidden fundraising waters.

When it comes to that station relationship, there are three ways NPR can approach raising money directly from listeners. The first would be for NPR to forge ahead without involving stations. To NPR’s credit, it did not choose this option.

The second approach would be for NPR to treat stations as minority partners in the process. This is the option NPR chose for the Planet Money Kickstarter campaign. NPR plans to use excess revenues from the campaign for local station training initiatives. Stations will benefit a little bit from this fundraising effort but only in ways that NPR deems appropriate.

There are several downsides to using this approach long-term, the most important of which is station financial health. The financial impact of direct listener fundraising on station revenues will be significant. Stations will raise less money from listeners when NPR is asking those same listeners for support. Offering free “extras” to stations will do nothing to improve long-term station finances or the working relationship between NPR and its member stations.

The third approach would be for NPR to treat stations as full financial partners in the process. Stations will have to end up with more working revenue if NPR is to raise money directly form listeners. This is covered in our Current.org commentary on revolutionizing public radio’s economy. It can be done and it will help the public radio system grow stronger.

There will likely be more than $300,000 in excess revenues, maybe $400,000+, by the time the Kickstarter campaign ends. NPR could pass that revenue along to stations in the form of dues relief during its next quarterly billing cycle. It’s not a lot of money for each station, but it would be welcomed by almost all.

And that brings us to another benefit of the full financial partner approach. It is the fastest and most permanent way to restore high levels of trust between NPR and its member stations. We’ll have more on that in our next posting.

A Not-So-Modest NPR Fundraising Proposal

noreply@blogger.com (RadioSutton) — Wed, 01 May 2013 13:01:00 +0000

Little did we know when writing our last posting - "The Inevitability of NPR Raising Money Directly from Listeners" - that NPR was planning its first test of direct fundraising from listeners.

NPR's Planet Money launched a Kickstarter campaign last night, a clear experiment on NPR's part to get direct access to listeners' wallets. The goal is a very modest $50,000 in 14 days. That goal should be exceeded in less than 24 hours.

NPR's not the only public radio network going after listener money now. American Public Media programs have been raising money directly from listeners for several years. Last month, PRI's The World launched a campaign on Indiegogo. This American Life has run several direct-to-listener campaigns as well.

NPR raising money directly from listeners could be very good for public radio. That's the essence of a commentary I wrote for this week's Current, public media's industry newspaper.

NPR could raise money in a way that everyone wins big. NPR wouldn't have to charge stations for its programming, would have tens of millions dollars more to spend on news coverage, and NPR would be able to award significant grants to stations for local news and digital initiatives.

That's right, instead of taking money from stations NPR would be giving stations its programs and money.

That would revolutionize the public radio economy at a time when that economy is threatened by digital disruption. All it takes is a commitment for all boats to rise together.

Click here to read the Current article - A Digital Revolution for Public Radio Fundraising.

See the links below for additional RadioSutton postings on NPR raising money directly from listeners.

Everybody But NPR
The NPR Pledge Drive Fuss

Public Radio 2018: The Inevitability of NPR Raising Money Directly from Listeners

noreply@blogger.com (RadioSutton) — Mon, 08 Apr 2013 15:08:00 +0000

This is the fourth installment in our series on what public radio looks like in 2018. In this posting, why NPR will be raising money directly from listeners and doing it with the belief that it benefits NPR’s member stations.

First, some background. NPR policy prohibits direct listener fundraising. This is to protect the business model of its member stations. For most of these stations, listener contributions are the single largest source of income. The prevailing belief in the industry is that, given the option, listeners would prefer giving their money directly to NPR and not their local stations. The assumption is that the entire public radio business model would be wrecked should that happen.

It will happen. Within five years NPR will raise money directly from listeners. It just takes a little basic audience segmentation to understand why.

Today there are three types of NPR News listeners:

Station Only Listeners
Station and NPR.org Listeners
NPR.org Only listeners

The first two types of listeners hear pledge drives and get off-air solicitations from their local stations. The NPR.org Only listeners do not.

The NPR.org Only audience will eventually be large enough, if it isn’t already, to be a significant source of funding for public radio. If NPR remains banned from asking them to give, then there will be one or two or five million listeners who are never asked to support public radio.

No pledge drives. No emails. No letters. No telemarketing. No annoyance. Such a deal.

And NPR claims that its online audience is much younger than current station audiences. That means a new generation of listeners who will grow to treasure public radio programs with the belief that those programs are free, paid for by someone else.

Further complicating matters, the Station and NPR.org Listeners will eventually start giving less to their local stations. It’s only a matter of time. Every single study on listeners and giving shows that people donate to public radio because they value the entire service they receive from the station. They give because the programming on their station is personally important and they would miss it if it were to go away.

Research also shows that listeners who use their stations less -- are less likely to give. That will be true for people who use their station less because they are getting the programming they value from a different source. Their station could go away. The programming would not. That will reduce the likelihood of giving to the station.

The entire public radio business model would collapse under this scenario. There will be millions of new listeners who will never be asked to give. There will be hundreds of thousands of current donors who will feel less compelled to give because they now have multiple sources for the content they value.

That will be bad for NPR given how much it relies on stations for income. It will be even worse for stations that need excess revenue generated from NPR programs to help pay for local and digital initiatives.

And listener support is likely to become even more important if station audiences shrink in the digital age. The fracturing of the radio audience will likely cause a reduction in business underwriting support for NPR and stations alike. On-air announcements will reach fewer listeners, lowering the number of sales and reducing the value of each announcement aired. Plus, Federal funding will be sharply reduced or gone in five years. The need for listener contributions will be greater than ever.

There’s only one solution and that is for NPR to raise money directly from listeners. It’s the only way to capture giving from listeners who will have no exposure to station fundraising and from listeners who value their entire public radio listening experience across station and NPR outlets, but not enough to give directly to a station. It is the only way to more than replace federal funding and shrinking business support.

In time, NPR will make this case to stations. They will argue it is in the stations’ best interests for NPR to raise money directly from listeners.

Getting there won’t prove easy even when it is obviously necessary. And NPR might not be willing to make the changes it must make to truly benefit stations.

The fundraising piece is simple enough. NPR could be up and running with a highly effective fundraising operation in no time. There’s sufficient evidence from markets with two NPR stations that shows many listeners will give to two public radio services if they value both. So stations will still be able to raise significant, albeit less, money from listeners. But collectively, NPR and stations should be able to raise more money from listeners, for less cost, than stations currently raise.

The problem is that public radio’s spending model, how money changes hands in the business, will also have to change dramatically to protect stations’ ability to serve their communities with national and local programming.

NPR will have to give up charging stations for its programs, or significantly cut back on what it charges, to take into account reduced station revenues. That change will make or break the new public radio economy.

If the new business model is implemented properly, with the stations’ best interests in mind, then stations will have a cash windfall to invest in local and digital initiatives. NPR will end up with more money than it gets from stations today. If implemented without the stations’ best interests in mind, then the new public radio economy will severely damage stations while providing NPR with more cash.

It is inevitable that NPR will be raising money directly from listeners in 2018. Whether it will be done for the betterment of all of public radio is the open question.

Public Radio 2018: Sibling Rivalry

noreply@blogger.com (RadioSutton) — Fri, 05 Apr 2013 01:45:00 +0000

This is part three of a series on what public radio looks like in 2018. In the first posting, we wrote:

The largest cause of any station audience erosion will come from within the public radio industry, not from outside competitors.
The reason is simple. Public radio news and entertainment programs have developed to the point that no single source can match the sheer volume of quality content delivered on a daily basis, seven days a week.

Public Radio spends hundreds of millions of dollars annually to create its content. NPR alone invests $72 million annually in news. Its total annual programming expense is around $88 million.   The cost of matching the volume and quality of public radio’s content is very high, especially in the digital space, where most media organizations still struggle to break even.

There are only three serious competitors for today’s public radio station audiences – the stations themselves, the networks that distribute the high quality national programs to stations, and listener indifference.

The best way for stations to keep, and indeed grow*, the audiences they have is to continue to provide a compelling mix of high quality network news and entertainment programs during peak radio usage hours, supplemented by local content and programs produced to network standards. Stations should extend their entire terrestrial radio brand – national and local -- into the digital space.   Stations brand should be the same across platforms and they should supplement that brand with additional content and the effective use of social media.

But this is not the strategy public radio’s networks are pursuing. Their digital strategies prioritize network access over local access. So today, public radio’s best radio content is now available in near-real time on the web. For example, all of the stories in Morning Edition now post as a playlist by 7:30am Eastern Time. A listener can now go to NPR.org and hear all of the network stories consecutively and without interruption.

Compare this to the policy around satellite radio. The NPR Board was very concerned that running NPR News in real time on satellite radio would kill local station audiences. And kill is not too strong of a word here. So the board prohibits, to this day, the real time airing of Morning Edition and All Things Considered on satellite radio.

The NPR Board recognized that the biggest competition stations could ever face was NPR itself. As mobile devices and digital dashboards become more common, the circumstance that is most likely to pull listeners away from a local FM station or its digital stream is an alternative way to get the same content. And this is now the strategy set by the NPR Board.

Times have changed. Significant competition will not come from a commercial news entity or a non-profit start-up. It will be other public radio outlets. We know this because we see it already in markets where two stations carrying Morning Edition and All Things Considered.

But there might be an even bigger competitor for local station audiences -- listener indifference. This is already happening two ways at some stations.

First, station program offerings are suffering from too much local content for the sake of local content.   Listeners don’t tune in for local. They tune in for interesting. They tune in for quality. And when they don’t find it, they are pushed away.

Second, some stations aren’t executing the programming basics as well as they used to because the energy and resources required are being diverted to digital. Weak programs remain on the schedule. Interstitial content fails to add value to the listening experience. It’s an issue of quality control. And when listeners don’t find quality, they are pushed away.

Pushing listeners away is typically how public radio stations have lost audience over the decades. Listeners are lost when they become indifferent to the station.

That will be true in the digital age. Increasingly stations have the means to be on all digital platforms. They have the means to market and promote where and how to find the station in the digital space. But if the current station offerings are diluted in the digital space, then the listeners will become indifferent. If the station brand they know from the radio – national and local – is different in the digital space, then the listeners will drift away.

They won’t have to go far to find what they want because the most significant competitor will be in the family.

* Yes, there is still room to grow the broadcast audiences for public radio. Most stations capture between 35% and 40% of their own listeners’ listening. That is, the typical public radio listener spends less than half of his radio listening time with the station. The balance of their listening goes to the competition. Better programming and promotion wins more listening from the competition. And remember that the average weekly audience is just that – average and weekly. Some weeks the audience is bigger than average. And then there are those people who listen every 8 days, or 14 days, or 30 days. Get them to listen more frequently and the weekly audience goes up. Some studies show the monthly audience to public radio stations is 50% higher than the weekly audience. There is room to grow the audience. But it requires recommitting to radio growth nationally and locally.

Public Radio 2018: Radio Still Rules

noreply@blogger.com (RadioSutton) — Fri, 08 Mar 2013 12:50:00 +0000

This is part two in our series on what public radio is likely to look like in 2018. You can read part one by clicking here. In this posting, why public radio stations will still be, by far, the most significant source of listening to public radio content in 2018.

Simply put, listening to public radio stations dwarfs listening to public radio content digitally. Let’s do the numbers.

In Spring 2012 more than 37 million people tuned in to public radio.^
The average number of weekly tune-ins per listener is around 7.5. +
That means public radio listeners chose to listen to public radio stations more than 13.5 billion times in 2012.
All of those tune-ins translated into more than 8 billion hours of listening.
Morning Edition was the biggest draw, attracting 12.3 million listeners per week.
More than a dozen public radio programs have weekly audience of 1 million or more.

By comparison:

This American Life claims to have one of the largest weekly podcast audiences with around 700,000 downloads per week.

While there’s no single source of web and mobile statistics, the most optimistic estimate today is that streaming listening equals 3% to 5% of radio listening.*

In rough numbers, digital-based listening would to double every year for the next five years to equal the amount of radio listening that public radio earns today. That is – the web-based audience would have to increase 100% over the previous year, every year, for five years.

There’s no doubt that digital-based listening in all of its forms will play an important role in growing public radio’s audience. But the idea that digital-based listening will become public radio’s leading source of audience by 2018 isn’t realistic.

Business strategies built on the assumption that radio audiences will be less important in 2018 than they are today are likely to be failed strategies.

^Source: NPR Audience Insight & Research

+Tune-in and TSL estimates with assistance from Audience Research Analysis

* NPR reported that in June 2012, the average aggregated web streaming audience to 88 stations it tracks was just under 7,200 people. That means that the average streaming audience to any one station was less than 100 listeners. It does not include mobile listening. We reached our conclusion using reasonable extrapolations to all public radio stations with mobile listening included. Got better numbers? Please share them.