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Arbitron plays
tough: Rolls out PPM


Radio ratings service goes live in eight markets

Oct 6, 2008

Don't mess with Arbitron.

Last Thursday, the radio ratings service got a letter from the New York Attorney General's office threatening to seek a court order to block the rollout of its portable people meter for measuring radio audiences, set for Wednesday.

In response, Arbitron took the new electronic service live earlier today in eight major markets.

It also went to federal court this morning seeking an order to block New York Attorney General Andrew Cuomo from taking any further actions to block the rollout in the New York market.

Cuomo contends the PPM undercounts audiences of minority-owned radio stations. Arbitron denies that charge.

"Effective today, the PPM radio audience estimates for these markets should be used as the basis for buy/sell transactions of radio commercial time among subscribing stations, agencies and advertisers," reads a statement from Arbitron earlier today.

The system is now live in New York, Los Angeles, Chicago, San Francisco, Nassau-Suffolk, N.Y., Middlesex-Somerset-Union, N.J., Riverside-San Bernardino, Calif., and San Jose, along with Philadelphia and Houston.

"In addition, the July and August PPM survey months, which Arbitron had previously released as 'pre-currency' information, are now designated as 'currency' data. The Spring 2008 diary-based radio audience report (April 3-June 25) is no longer deemed 'currency' for buy/sell transactions," Arbitron said.

The statement quotes Arbitron chairman and CEO Steve Morris: “We are commercializing our Portable People Meter radio ratings services in these markets in order to meet our obligations to our customers and to the radio industry.”

Arbitron's move is a bold one, and clearly intended to short-circuit Cuomo and any other state officials from interfering with the PPM rollout. Once up and in use by media buyers and sellers, the new system becomes the marketplace currency, making it all the more difficult to roll back in favor of the old diary system.

Arbitron’s move comes after years of efforts to get the PPM system adopted and after already delaying its rollout once to address complaints that it undercounted minorities, and at what it says was considerable expense.

Late last week, Cuomo put the ratings tracking service on notice that the AG's office was prepared to seek to halt the PPM rollout in the New York market, on the grounds that it undercounts minority audiences and that it had not yet been accredited by the Media Rating Council, which certifies the accuracy of media ratings for bodies such as Arbitron and Nielsen.

The letter, from Alphonso David, deputy bureau chief of New York's Civil Rights Bureau, says:

"The PPM methodology Arbitron intends to use beginning on Oct. 8 in New York has not been accredited by the Media Rating Council Inc., the primary accrediting agency for ratings services in the United States, and appears to contain design flaws that will disproportionately impact minority communities, broadcasters, and businesses."

The letter gave Arbitron until tomorrow to come up with a good reason why the state should not initiate a suit to block the PPM rollout.

That turns out be one day late.

Had New York gotten an order to halt the rollout, it would not have stopped the rollout in other markets, but it could well have emboldened other states to step in as well to seek court injunctions in those markets.

In response to Cuomo’s letter, Arbitron released a statement:

"We intend to vigorously defend the company and its interests. We also fear that the radio industry will suffer continued harm and be placed at a competitive disadvantage if PPM is delayed further."

The PPM has won strong support from media buyers as vastly superior to the old diary system for tracking radio listening, in which sample participants are required to enter their listening choices. The PPM is a passive electronic system that picks up electronic signals through a device worn by the participant.

While the system has faced criticism for undercounting minorities, the broader reality is that the system reports lower listening numbers for most all stations.

As Stan Gerber, executive vice president and chief strategy officer at JL Media in Union, N.J., explained to Media Life last week, "The PPM is a far better, more sophisticated and accurate measuring system than we’ve ever had. But it’s upset the apple cart. People aren’t listening as much as they said they were listening.”

The problem, as that Media Life story pointed out, is that the ethnic stations are at substantially greater risk. Some are seeing ratings decline by 50 percent or more, and most are small-business operations. They could never survive with the revenue cuts they stand to suffer.

But Arbitron has steadfastly defended the methodology of the PPM, noting in its statement: "After many years of market trials, and almost two years of commercialization, the PPM is providing more timely and detailed insights into the behavior of radio audiences. These insights have already been used with demonstrated success by radio programmers, including those at Urban and Spanish-language stations."



Louisa Ada Seltzer is a staff writer for Media Life.




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