Making Financial Projections in Religious TV

Posted On
02/16/2009

Making Financial Projections in Religious TV

From time to time I’ve been asked about making financial projections on religious TV programs. In other words, with a typical daily or weekly program, can we project from a fundraising point of view what a particular program will make based on past or similar programs? From my perspective, if we could project the results of our programs successfully, we’d all be billionaires. The problem is the finicky nature of the TV audience. The secular networks like ABC or NBC literally spend tens of millions on audience research year in and year out, and still produce failing shows every single season. If they’re spending millions doing it, I have serious doubts our
meager methods will yield much.

The response I’ve gotten from the most watched religious programs on television backs that up. They’ve told me that there are simply too many factors to make those projections accurately. For instance:

What’s the competition on TV on a particular day?
What’s the offer? How’s that offer priced?
Is it a product or a project?
How’s the production and creative level of that particular show?
Was the host/teacher/preacher compelling that particular day, or was he or she off?
What’s the theme of that particular program?
How’s the mail response been this month?
How’s the economy doing?
What’s our audience rating today?

Just because a similar show did $X last year on this date, doesn’t mean it will happen again because of all these competing factors. So let’s take that pressure off the producers. I believe some people get their shorts so tied up in knots over making numbers, that we’re not giving programs the creative space to breathe and grow.

When we keep panicking every time we don’t hit these vague numbers – we toss solid strategy and creative ideas out the window, and that takes it’s toll.

The battle for TV audiences isn’t won on a daily basis – it’s won over the long haul. In fact, Joyce Meyer is so convinced of this, they’re producing programs right now that won’t even be broadcast for at least 6 months. Programs she produced nearly a year ago still haven’t been broadcast. So it’s impossible for her to react based on day to day results. But she believes it’s about the long haul – not the short term gain.

This entry was posted on Monday, February 16th, 2009 at 10:19 pm and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

http://youtube.com/wstkandwsciro Rev/Dr Shirley Canniff

Phil,

I couldn’t agree with you more. As a christian, broadcaster and producer, its about the daily committment from the Lord’s heart to ours, as we press in and tap into the creative resources of heaven. And the faithfulness that we as believers should exhibit in producing the programs that God wants us to produce as His ambassador/producer here upon the earth . We need to be God’s daily bread to the masses here upon the earth and be willing to bring heaven’s content onto the earth as it is dictated to us from the greatest producer of all "our Father who art in heaven".
Jon Laria

Phil,

You raise some very valid points and for much of this commentary I would agree. However, after producing Christian TV for the last seven years I found that projections can be made that will reasonably estimate the daily income from a program based on past performance of that type program and appeal that is being broadcast. I believe that ninety percent of the time my projected TV income was within plus or minus 10% of the actual TV revenue. There are surprises that come along both good and bad, but that’s the exception, not the norm.

The 1-800 TV revenue is a critical component of the budget and to not establish goals by month and than by day would be irresponsible. It would be like trying to go a vacation and not getting directions to where you are driving to. Budgeting provides a road map and allows you to make course corrections along the way. I believe God expects us to be good stewards and having a plan is part of being a good steward.

Forecasting accurately during these turbulent and unprecedented harsh economic times is another story altogether. The best you can hope to model is how much are you going to reduce your historical financial performance for today’s economic condition. But it does not eliminate the need to have a budget.

Jon Laria
Mary Hutchinson

With my clients, I see this in degrees.

The key is balance–yes we have to know what a typical program does re income/orders. We need to study the highwater marks (and the low ones). We need to build creative strategy that cause more to be moved to reach out to the ministry.

But no one can project what any untested program will do on any day. And with a tested one–one that was broadcast already and measured–there are still many things that can cause it to do better or worse than tested.

If they could, they would be very, very rich.
Bart Breen

You can make financial projections in any context you want. The question is will they be statistically valid within the context of the economic extremes of a volitile general economy?

It all comes back to the model you use and how well it ties to the general environment and how recent and accurate your data is. Usually this is achieved by weighting recent data more heavily and taking sample more frequently during times of change.

Continuing with models that were constructed before some of the major changes to the economy or that rely significantly on data produced before those changes are likely going to be less valuable than they were when the changes were slower and the economy less volitile.
joesindorf

Great Post, Phil!

And greetings to Jon & Mary (Jon – call me, I’d love to get together).

I live on both sides, and in the middle of this issue. I produce (as a freelancer) a daily show (which I will not name) and every day the response (dollars, calls, mail, web) is examined and if it’s under budget, then we jump into crisis mode and knee jerk the schedule replacing the next show with something sure to make the phones ring.

One show comes to mind that did so amazingly well everytime we aired it that we discected it, examining every part, the content, flow, amount of prayer, the ask… in order to recreate the response on other shows. (side note: I think we just succeeded, btw)

I clearly recall producing a live, national show (think really big, highly respected show) and every day I had a computer monitor showing me minute by minute the live incoming phone activity… if the stream dropped, I had to do some magic and get it back up. (so to speak)

Jon is right – just throwing money out there without counting the cost and having a realistic expectation of return is bad business and bad stewardship. You’re right, Phil, in that changing directions in mid stream based on numbers from one show is wacky. Mary is right – if we had that crystal ball we’d all be rich. I like how Mary thinks.
Mary Hutchinson

Joe, you must get invited to lots of parties :)
Anthony Peterson

I can see a PHD in this. Reminds me of the research project I did in my MBA. I was able to forecast demand for peanut butter by testing the coefficient of correlation for about 14 different factors such as pricing, TV, point of sale promtions, weather etc. Using mulitple regression on the top 5 or so correlations i was able to forecast demand with up to 6% more accuracy than the manufacturers product manager. You need really high quality data – which is in abundance for supermarket scan data, but I’m not sure for Christian television. It’s a shame. It would be great to approach the thing from a more rigorous quantitative analysis.
Steve Newton

All good points….

We’ve been preaching analytics, ROI’s and MER’s (media eff. ratios) for years…I guess in a down economy it’s finally catching on.

With tightening budgets… some ministries are looking more short term like DRTV clients. Basing decisions on positive response and what product offers, guests, books, DVD’s, issues, etc. work best.

Connected with a call center and web access it gives key decision makers a clear picture of each show’s performance by same day or early the next day… providing the ability to either ramp up or down media expeditures based on response. Not just with infomercials, but we’re beginning to see more of this with weekly shows as well.

In the past it was all about ratings, shares, demos, etc… all still important, however many are now looking hard at ROI and using media dollars more wisely.

Phil Cooke

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