A new era for radio ratings is here. Nielsen has updated its PPM (Portable People Meter) audio measurement practices. The credit for listening will now be three minutes every quarter hour rather than five. This change will become effective in January 2025.
So, what does it mean for radio spot advertising? We discussed this topic in our recent webinar, The 2024 Marketron Review for Radio. While we don’t know exactly how this will play out until it’s in practice, some positive results could impact spot prices.
Why the Change from Five Minutes to Three?
Nielsen formally addressed why they made a change, stating it was in response to industry feedback and current listener habits. The updated time period should allow the PPM to capture more occasions and impressions. Further, this adjustment could deliver higher audience levels, which may influence radio’s presence in the media mix.
Despite strong statistics around listenership and AM/FM radio’s continued ownership of ad-supported audio, radio still doesn’t get its fair share of local ad dollars. This move to shorten the engagement time could support the case for spending more on airtime spots.
In a piece by Nielsen’s Rich Tunkel published on the RAB blog, he offered more clarity on the organization’s shift. He asserted there would be no other changes to PPM. The “new” audience will consist of new listeners who listen in shorter intervals and additional reported moments from existing ones.
This new audience will likely also skew younger, according to Tunkel. He noted this measurement change will allow broadcasters to experiment with “length, quality and placement of commercial stop sets.”
What Are the Potential Positive Implications of the Three-Minute Listener Qualifier?
Stations are happy to welcome the three-minute listener qualifier. There are many positive effects it could have on revenue, including these listed below.
Stations Could See Higher Ratings, Boosting Spot Rates
The projection for OTA radio spot revenue will either be flat or slightly less in 2025, according to BIA’s 2025 U.S. Local Forecast. This three-minute marker could help these numbers. They’ll provide even more proof that radio works for advertising, demonstrating to advertisers that there is a large and engaged audience of radio listeners.
Radio’s most consequential attribute for advertising is its reach. It is the leader in mass media, surpassing TV. With the new three-minute qualifier data, stations can tell this story even more vividly.
The increased ratings potential could directly increase spot rates, as they’ll be more in demand and valuable for advertisers.
Shorter Stopsets Could Become More Common
As a result of this pivot in measurement, stations could also take more liberty with avail placements with shorter stopsets becoming more frequent. The listening experience would evolve, which may impact how you sell and schedule radio ads.
For example, tops and tails or bookends could become less premium as tune-out lowers with shorter, more regular stopsets.
Radio Advertising Attribution Could Improve
Another potential outcome is improving radio advertising attribution. It will allow stations to better identify listeners as having heard an ad. They would be less likely to be in the middle of a three-minute listening session within the walls of the 15-minute clock segment.
The True Impact of the Three-Minute Listener Qualifier Is TBD
The outcomes discussed above are, at this point, hypothetical. The industry won’t see the influence on sales until there’s a three-book average to review. Its debut in January could see a typically slow sales month into one in more demand.
As this plays out, we’ll keep watching for data and insights and report back to you!
