Arbitron raises benchmarks; Evaluating diary guarantee


CBS Radio’s Lisa Decker chaired her first meeting of the Arbitron Radio Advisory Council this week and reported progress on higher benchmarks as RAC members had their first interaction with new Arbitron CEO Michael Skarzynski. Also, a money-back guarantee for diary markets, like that already in place for Portable People Meter (PPM) markets, is in the works.

With lots of new faces all around – Skarzynski was joined by Arbitron’s three new Executive VPs as well – Decker said the two days of meetings were marked by open and honest discussion and resulted in “significant progress” on several fronts.

For PPM markets, Decker reported these benchmark improvements:
— The Persons 6+ DDI benchmark will move from 90% to 95% in year one of PPM currency and 100% in year two.
— The 18-34 DDI will move from 70% to 80%.
— The 18-34 average in-tab will increase from 60% to 70%
All of the above benchmarks will be measured on a 13-month rolling average.

In addition, the cell phone only in-tab target will increase from the current 10% to 15% by the end of 2009. Arbitron had previously committed to a target of 12.5%, so that has been increased again.

“The Council continued to focus on diary market initiatives,” Decker said in a telephone conference call with reporters. One full day of the two-day meeting was devoted to diary discussions.

Decker says that in all diary markets Arbitron has now agreed to a new DDI benchmark for Persons 18-34 of 70% in year one and 80% in year two. This will begin with the Spring 2009 book.

At the RAC meeting last November, Council members had asked Arbitron for an 18-54 guarantee for all diary markets, just as for PPM markets. That request was renewed this week and Arbitron has agreed to a DDI guarantee for diary markets, with the company to report back to the RAC at its summer meeting on ideas for target levels and timing.

One reporter suggested that such guarantees were “toothless tigers” since it appeared Arbitron had never had to make good on a money-back guarantee payment. Skarzynski insisted that was not true and that Arbitron had indeed made refunds for falling short of its guarantees. He refused, though, to identify the markets or circumstances where the refunds had been made, citing client confidentiality. “We don’t get involved with toothless tigers,” the CEO said.

Although Arbitron has been under attack in Washington, DC and from political activists elsewhere for allegations that PPM undercounts Black and Hispanic audiences, Skarzynski said no RAC member raised such concerns at this week’s meeting. He said, though, that Arbitron reported on the initiatives it has underway to improve demographic performance, particularly for 18-34 year-olds, and the company reviewed its ongoing program of improvement for PPM.

Asked whether diary markets were also likely to got to a 15% cell phone only target, just like PPM, Skarzynski said that was, indeed, likely. Stay tuned.

RBR/TVBR observation: Meanwhile, Wall Street is watching to see if Arbitron is able to sign a new contract with its biggest customer, Clear Channel. The last we heard was that the parties were far from an agreement, with Clear Channel hunkering down for the possibility of doing without Arbitron measurement. That might be just a negotiating tactic, but in this terribly depressed ad marketplace, how much would it really hurt not to have ratings data to sell from? In the meantime, Clear Channel can study the results from Nielsen’s new US radio ratings service which launched this year in 51 markets. Clear Channel is subscribing to the Nielsen service in 17 markets where it has stations.