Research
Radio buyers can expect deeper buys
By Kevin Downey
May 1, 2007, 01:08

When Nielsen's local people meter was first rolled out, it was a welcome headache for media buyers. It was all the data they could ask for about local TV viewing, coming in place of very little, and it would give a far better, often different picture of what people were actually watching. But it also would take months to digest.

It looks to be much the same with Arbitron's Portable People Meter when it begins rolling out.

The first official radio ratings from Arbitron’s long-in-the-works PPM are out for the Philadelphia market, and those initial ratings suggest very different radio listening behavior than what the old diary system reported.

More people are listening to radio than previously thought. They're also listening to more stations, and they’re doing so for longer periods of time.

And, most significant, ratings for specific demographics are dipping on some top stations. Much as with Nielsen's old TV diary system, it appears Arbitron's diary households were wont to fill in fewer stations than they actually listened to and to fill in the best-known or biggest stations.

“The diary says the average listener listens to two or three radio stations but the PPM says the average listener is exposed to five or six stations,” says Thom Mocarsky from Arbitron.

In the end, once the PPM system is fully rolled out, that means media buyers will be booking many more spots on a longer list of stations to reach the same number of people as current schedules.

Buyers will have to buy more units to achieve current reach and frequency goals to reflect the fact that listeners are splitting their time among more stations. That will tighten up inventory and will give stations some leverage to raise prices.

“I suspect that the unit rates may not change very much but the cost-per-points will go up,” says Christy Rodibaugh, senior media buyer at MARC USA. “I think the ratings will be more accurate and it might take more spots because ratings will be down a little bit.”

Maribeth Papuga, senior vice president and director of local broadcast at MediaVest, says buyers will combat inflated prices by using a deeper list of stations and dayparts other than early morning and afternoon drive time, when people listen to the radio while commuting to and from work.

“In the immediate future, buyers will still have the same audience goals, so they’ll still try to buy the same number of ratings points but they’ll have to buy more units,” she says. “There may be some inflation just based on that fact because you have more demand. But that’s when you get more creative.”

The differences between PPM ratings and diary ratings are tough to gauge based on the information released. Arbitron changed its sample to include people over the age of 6, compared to 12 years or older under the diary, and it now only reports stations in the PPM sample, not all stations survey respondents had reported in the diary.

Still, there are noticeable shifts in listening.

In March, for instance, adult contemporary station WBEB-FM was No. 1 with a 9.2 percent share of the 6-plus audience on an all-day basis, compared to an 8 share among people 12 or older in the fall. Classic hits WOGL-FM surged to a 7.4 share from a 4.5, while urban contemporary WDAS-FM fell to a 5.1 from a 6.3 share.

“People get hung up on ratings going down or the share being different,” says Blaise Howard, vice president and general manager of WBEB-FM. “[But] you now have an accurate measure of what you’re buying.”

The new ratings are being released once a month, up from four books a year that Arbitron releases in diary markets. Arbitron will roll out the PPM into other markets for the next few years, with Houston going live in June and New York in December.

The paper diary was discontinued in Philadelphia with PPM ratings becoming the currency used in negotiations.

One likely outcome of the shift to PPM is that radio buying and selling will eventually look a lot more like the television marketplace, where buyers are often given ratings guarantees, they conduct post-buy analyses, and have TV stations make up for ratings shortfalls with additional units.

But buyers say it’ll take about a year to get accustomed to the new ratings and longer than that before any major changes take place in the buying and selling of radio.

“A lot of people still don’t know what to do with the raw data yet because it’s so new,” says Papuga. “Statistically, how should we be using this? We still haven’t studied it since it’s gone live.”