PPM: The First Year – A Tale of Two Cities

While this report was prepared using PPM Monthly data through March of 2008, the just released April 2008 data was compared to make sure there were no significant differences from from the conclusion reached using the March 2008 data (there was not).

As we look at this comparison, it’s important to keep in mind that Arbitron has promoted increased CUME as a significant PPM metric.

1) In Houston, PPM participants are recruited using an address based sample frame. The demo cells are relatively balanced and DDI levels are consistent throughout the sample. Furthermore, the Houston PPM has acquired MRC accreditation (specifically for the Monthly AQH number).

– Houston’s year to year Persons-Using-Radio in the PPM was actually up (Source: Arbitron’s PPM Analysis Tool).

– Most of the major stations either grew or were stable over the last year.  Specifically:

In the Top 10 Houston Stations, 6 had stable Cume year-to-year, 3 were up and only 1 was down, by a very insignificant degree (less than 10,000 people).

In the Top 20 Houston stations, 10 were stable, 7 gained Cume and only 2 stations lost Cume (there was1 new station reporting which had no previous data).

2) Philadelphia sees a dramatically different picture.  In Philadelphia’s PPM measurement, Arbitron uses the unaccredited telephone based method to recruit PPM respondents (referred to as the “Radio First” method).  Markedly different from Houston in methodology and results, Philadelphia has suffered from samples with poor demo cell balance and DDI levels in the 18-34 demos that barely passed the minimum benchmarks Arbitron themselves set. The MRC denied accreditation for the Philadelphia PPM “Radio First” methodology earlier this year.

– Philadelphia’s year to year Persons-Using-Radio was also flat (it was down just slightly, -1.3%, a market loss of 55,700 people).

– Most of the major stations LOST CUME.  Specifically:

Among the Top 10 Stations in Philadelphia, 9 out of the Top 10 stations lost Cume – an average 122,000 loss per station (Including A/C marketing giant WBEB which lost 125,900 in Cume). The only station to gain Cume was WRFF, which switched from a low rated Spanish format to an Active Rock format during this 12 month period, gaining over 550,000 listeners. While WRFF could explain a loss for WWMR, could it really explain the large loss sustained by A/C WBEB of the loss of 134,500 listeners at Urban WPHI?

Comparing the Top 20 stations in Philadelphia, 13 of the top 20 lost Cume, averaging a loss of 115,000. Only 4 of the Top 20 Stations showed an increase in Cume, while 2 Stations were flat (within 3%). One station, WPST, was not included in the March 2007 PPM so we do not know how they fared.

Since the Philadelphia March results were released 4 weeks ago, Arbitron pundits have made a variety of guesses about this the cause of this cume loss.  These include such comments like:  1) listeners do not like the Philadelphia stations as much anymore and 2) radio does not market any longer (tell that to marketing giant WBEB, who lost 125,900 in Cume).  However, the real question is: why are audience cumes in Houston stable or growing while Philadelphia Radio audiences like they are Newspapers’ dying circulations?

The obvious place to look for answers is to the 2 different recruitment methods.  If indeed, there is a problem with the telephone recruitment that Philadelphia uses (and thus the huge demo problems), we could expect to see those same issues in subsequent PPM markets.

AND in fact we did.

New York and Nassau-Suffolk have only been live with PPM since October, but these past 7 months show the same troubling trends as Philadelphia, which uses the same version of the PPM recruitment methodology and is not accredited by the MRC.

In New York the PUR is stable. 

Of the Top 20 Stations 12 of the top 20 stations lost Cume. It is important to note that, of the major stations with losses, WRXP changed format from WQCD/Smooth Jazz to Alternative Rock.  It’s possible some of the growth in the Urbans was audience transition from WQCD.  Without this major format change, it’s possible none of these Urban would have grown.

Only 4 New York stations gained Cume.  Note that of these 4 stations with growth, 3 are Urban and the other, WABC, benefitted from the return of Don Imus to the market. The remaining stations were flat.

In Nassau-Suffolk, the PUR is also stable.

However, 9 of the top 20 stations lost cume. 7 stations gained cume, while 4 were flat.

Bottom line:  PURs in all 4 markets are statistically stable. Houston, the sole market with MRC accreditation and the only market to use address-based recruitment, there are stable radio station cumes, a relatively balanced sample by demo cells and good DDIs.   Conversely, in the other 3 PPM markets, which use telephone recruitment (Philadelphia, New York and Nassau-Suffolk), we see marked cume declines on most of the top 20 stations. These 3 markets also have severe 18-24 and 25-34 sample issues, combined with a lack of MRC Accreditation. 

Led Zeppelin, said it best years ago. “There are 2 paths you can go down, but in the long run, there’s still time to change the road you’re on”.

Radio is at the crossroads. Which path should it follow?

Before the PPM rollout continues, should Radio look to make Arbitron’s address based recruiting the standard?  This would most issues from the critics as 1) the service would be MRC Accredited,  and 2) the sample could be better controlled within the problem demo cells leading to more stable numbers and performance grantees close to or exceeding 100?

Or should Radio continue to allow Arbitron’s telephone recruitment with no MRC Accreditation, using a recruitment method that for some reason, makes radio stations look like they are dying like Newspaper’s circulation?

--Consultant Randy Kabrich

See the data used in the study in the pdf attchment link below