Arbitron officials were facing criticism on two fronts yesterday at the NAB Radio Show. In a session on PPM, WBLS-FM New York General Manager Deon Levingston complained that not a single agency in New York has indicated that it plans to adjust for the 30-40% ratings decline expected as the market shifts from diary to PPM as currency next month. And then in a session on diary markets, broadcasters were complaining that by telling the New York City Council hearing on PPM last week that diary measurement overstated listening, Arbitron CEO Steve Morris had depicted the company’s diary service as unreliable.
In the session on PPM, Arbitron President of Sales and Marketing Pierre Bouvard had noted the need for local radio sales teams to talk with local agencies and prepare them for the math to make the conversion from diaries to PPM in making ad buys – the basic formula that Arbitron has presented is that 70 GRPs under PPM can equal 100 GRPs from diaries. He repeated that advice to school the agencies after Levingston rose from the audience in the Q&A segment. “My account executives have been engaging in conversion discussions for over two years,” the GM said. But with New York set to have PPM become ratings currency next month, Levingston insisted that not a single agency is planning to make that adjustment. The inference is that radio revenues will drop because the agencies will continue to buy with GRP targets from the former diary world.
Bouvard acknowledged that some agencies have been slow to adapt to PPM, which he attributed to having only two markets to date were PPM has been ratings currency for buying and selling. Bouvard said increasing that to 10 markets next month should help agencies to establish new benchmarks for buying under PPM.
It was just this week that Arbitron announced new initiatives for diary markets, which will far outnumber PPM markets for the foreseeable future. But at a Radio Show session on diary markets there was considerable ire resulting from Morris’ comments to the NYC Council that PPM measures actual listening, while diary keepers often over reported listening to their favorite stations.
“A lot of people interpreted that as saying that diaries are wrong and PPM is right,” said Gerry Boehme, Exec. VP, Strategic Planning & Information Technology Services, Katz Media. Pricing is always a negotiation and Boehme said agencies may try to use Morris’ comments to drive down pricing for diary-based ad buys.
Tom O’Sullivan, VP, Sales Operations, Business Development and Diary Service, didn’t directly address the comments made by his boss, but focused on the enhancements Arbitron has announced for its diary service. He assured clients that improving sample quality is the number one issue for Arbitron. And while PPM is getting lots of press, he noted that Arbitron will still have 250 diary markets for many years to come.
Eastlan Resources President Mike Gould wasn’t shy about tweaking his larger competitor in radio ratings. “You can continue to subsidize PPM, or you can look for other alternatives,” he said. And Gould noted that his company has included cell phone only homes in its telephone recall-based ratings for the past six months – something Arbitron is adding to some of its diary markets next year.
We should soon be hearing from Cumulus Media about the outcome of its RFP for a new ratings service for its stations in markets ranked 100+. So, what will the impact be for radio having not just Arbitron and Eastlan, but also a third ratings service? “I don’t think it can help,” cautioned Michael Osterhout, President and COO of MCC Radio LLC, the radio subsidiary of Morris Communications.