Arbitron settles New York & New Jersey lawsuits over PPM


The Attorneys General of New York and New Jersey announced that Arbitron has agreed to take steps to ensure that panels for its Portable People Meter (PPM) radio ratings service are racially diverse and that participants know how to use the devices. The company will also pay $490,000 (including $100,000 to NABOB and SRA to promote minority radio) to settle the lawsuits brought by NY AG Andrew Cuomo and NJ AG Anne Milgram over PPM and now has deadlines to win Media Rating Council (MRC) accreditation for PPM in the New York and Philadelphia markets. Arbitron CEO Steve Morris says the changes are within the framework of what the company was already doing to improve PPM.

“The radio airwaves should represent the diversity of New York State. With this lawsuit, we sought to address the misrepresentation of a flawed product in the marketplace and its impact on the communities that need the most protection. This agreement ensures that Arbitron will fairly measure radio listenership in New York and fairly represent New York’s diverse radio market. As Arbitron works to improve this product, which should not have been released in its current form, my office will aggressively hold Arbitron to rigorous standards to make PPM a better product,” said NY Attorney General Andrew Cuomo in announcing the settlement.

“This is an important settlement, because it will ensure that Arbitron consumers are receiving a more accurate sampling product while, at the same time, ensuring that minority owned broadcasting outlets are competing on a more level playing field,” said NJ Attorney General Anne Milgram.

Arbitron provided this summary of the New York settlement (which was actually more detailed that the summary from Cuomo’s office):

“Recruit panelists using a combination of telephone number and addressed-based sampling methods beginning January 2009. Arbitron has committed to use the address-based sampling technique for 15 percent of our recruitment efforts in New York by July 2010;

Increase the sample target for persons residing in cell-phone-only households to 15 percent of the total New York sample target by July 2010;

Set a target of 20 percent for the New York Sample Performance Indicator (SPI) by 2010 and make all reasonable efforts to achieve a minimum 15 percent SPI level by July 2009, 16 percent SPI level by October 2009, and 17 percent SPI level by June 2010;

Take all reasonable measures to achieve average in-tab rates of at least 75 percent for all age/sex and race/ethnicity demographic groups by April 1, 2009, and to ensure that subcategories comprising 10 percent or more of the New York Metro population fall within 90 percent of the overall 75 percent target;

Provide to subscribers monthly reports detailing the PPM installed and in-tab sample sizes by individual zip code in the New York Market;

Complete a non-response bias study in the New York market by July 15, 2009. Should the study indicate any measureable bias, Arbitron will use all reasonable measures to address identified sources of ratings bias within 6 months;

Make all reasonable efforts to obtain and retain accreditation for the New York PPM radio ratings service from the Media Rating Council;

Fund an advertising campaign in the New York market promoting minority radio;

Include a disclaimer on promotional material indicating that PPM ratings are based on audience estimates and should not be relied on for precise accuracy or precise representativeness of the New York radio market.”

Specifically, Arbitron must obtain MRC accreditation for PPM in the New York market by October 15, 2009 or Cuomo can void the settlement and head back to court.

The New Jersey settlement is similar, but includes Philadelphia as well as the New York market. The deadline for 15% address-based sampling in the Philadelphia market is January 2011, as well as for boosting the cell phone only sample target to 15%. AG Milgram can rescind the settlement if Arbitron doesn’t secure MRC accreditation for PPM in the Philadelphia market (or the New York market) by December 31, 2009.

“Broadcasters, agencies and advertisers in New York can continue to use PPM measurement of radio without any hesitation or reservation. We are also pleased to be able to resolve this action within the framework of our continuous improvement program for the Portable People Meter ratings service in the New York radio market. These initiatives are sure to increase the accountability of radio to the benefit of all New York radio broadcasters and their advertisers,” said Arbitron CEO Steve Morris after settling with the New York AG. Arbitron admitted no wrong doing in settling the two lawsuits.

As for the cash, Arbitron will pay $260,000 to the State of New York, $130,000 to the state of New Jersey and $100,000 to the National Association of Black Owned Broadcasters (NABOB) and the Spanish Radio Association (SRA) to support minority radio and fund an advertising campaign of at least $25,000 dedicated to promoting minority radio.

Click the pdf link below if you wish to read the entire New York settlement.

RBR/TVBR observation: We still don’t think that either AG had any legal authority to stick their noses into this, but the settlements seem to be good for radio and, ultimately, good for Arbitron. Using address-based recruiting for part of its PPM panels in the New York and Philly markets should not only boost participation by minority cell phone only households, but draw in more young demos of all ethnic groups. We would expect Arbitron to look at expanding that to other PPM markets as well.