A Comparison of Influences on Fixed and Grid Radio Advertising Rates

Abstract

Abstract This investigation (1) identifies the variables which influence radio rate structure and (2) determines the extent to which these variables influence spot prices differently for stations with fixed rate cards and stations with grid rate cards. Regression analysis was employed to investigate the relationship between the independent variables (average quarter hour audience, station format, consumer spendable income per household, market population, number of radio stations per market) and the dependent variable (station rates) for both fixed and grid rate stations. A Chow test and a series of univariate t-tests were then used to investigate the differences between the regression equations, revealing that stations with grid rates do not base spot prices on audience delivery as much as stations with fixed rates. The major implication is that advertisers should avoid buying time from the top of the grid whenever possible, as these rates are priced higher than fixed rates yet deliver fewer listeners pe...