Audience fragmentation: you can run but you can’t hide

As television braces itself for a new wave of digital specialty channels, the talk around the proverbial water cooler has turned, once again, to audience fragmentation and its impact on the industry.

As television braces itself for a new wave of digital specialty channels, the talk around the proverbial water cooler has turned, once again, to audience fragmentation and its impact on the industry.

As someone who has spent most of his career as a radio broadcaster, I’ve never worried too much about fragmentation. In fact, from a radio perspective, fragmentation has turned out to be a blessing. Yes, there were some initial growing pains, but the overabundance of licensed radio stations drove the radio industry towards audience segmentation, which today is one of radio’s great strengths. I have no doubt that television will also adapt, and be the better for it in the long run.

Since coming to BBM, I have become acutely aware of the research challenges that audience fragmentation presents. It is one thing for a broadcaster to adopt a more segmented approach to programming; however, it is another matter to measure that station’s audience in a reliable way.

In truth, the research issues associated with smaller audiences have been with us for some time. Based on spring 1998 BBM TV diary data, 87.5% of programs in the Toronto market had ratings of less than 2.0 (individuals 2+). In spring 2001, the percentage had grown slightly to 88.2%. The comparable numbers for Vancouver were 90.8% and 90.3% respectively. And in the Montreal Franco Extended Market, program ratings under 2.0 grew from 59.7% in spring 1998 to 67.1% in spring 2001.

So, by this definition, the major markets have been close to saturation for some time and the less fragmented markets are moving quickly in that direction. The increasing penetration of satellite receivers in rural markets will fuel this even more.

From a research point of view, the plain truth is that fragmentation may be outpacing our ability to measure it with current methodologies. For example, a half-hour program with a reported rating of 2 could actually range between 1 and 3 ratings, 19 times of 20 – assuming a sample of 1,000. It’s a sobering statistic, which underlines the need for larger sample sizes – and I’m not talking about modest increases.

The introduction of 60 new digital television services later this year underlines the fragmentation trend. Recognizing that new approaches are necessary, BBM has created a senior position to focus on improving our research practices. The new VP, a statistician by training, will no doubt affirm that to double the reliability of the research, you must quadruple the sample, which is why BBM shopped the world for the most cost-effective meter technology before it introduced its meter service in 1998. We knew we had to make the industry’s dollars go further, and we have succeded: The April 30 issue of Mediaweek reports that a typical broadcast outlet in Boston is asked to pay roughly $1,125,000 US annually for its people meter service. This is more than five times what a typical broadcaster in Canada pays for the BBM Picture Matching meter service of comparable sample size.

It is possible to do even better in the future. BBM has the rights in Canada to Arbitron’s PPM Audio encoding – a technology that is currently being tested in Philadelphia and offers the potential to provide single source data for both television and radio, affording greater insights and economies of scale.

But as the saying goes, ‘It takes two to tango,’ and the time has come for the industry to recognize the need, and transform research savings into higher sample sizes. After all, as history has shown, when it comes to audience fragmentation you can run but you can’t hide.

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Jim MacLeod is president of Toronto-based BBM Bureau of Measurement. He can be reached at (416) 445-9800, by e-mail at jmacleod@bbm.ca, and fax (416) 445-8644.

For more on audience fragmentation, including response from media planners, see ‘Information explosion’ on page 24.