Arbitron stung by big groups


And Agencies also want high standard. Wow!

A hard-hitting letter from four of its large radio subscribers, demanding that it increase PPM sample sizes to resolve problems with demo in-tab underperformance, no doubt caused quite a stir yesterday at Arbitron yesterday. Clear Channel, Cumulus, Cox Radio and Radio One have demanded an "action plan" from Arbitron within 30 days. Cox Radio CEO Bob Neil reiterated the demand in a statement to RBR yesterday: ""Arbitron needs to understand that both radio broadcasters and agencies are united in demanding reliable audience estimates.  Low in-tabs are not acceptable, and no Programmer or Media Buyer can make good decisions if the data is bad.  We’ve seen enough in Houston and Philadelphia, along with the pre-currency reports in Long Island and New York, to see that Arbitron hasn’t been taking these sampling issues seriously.  Instead of their usual spin, we want action.  Not months from now – but right now," Neil said. But as this issue was put to bed, Arbitron was still considering its public response to the criticism.

The four companies, all of which had been critical of PPM but eventually signed contracts for the new methodology, are livid over the consistent problems Arbitron has had with hitting in-tab targets for 18-34 demos and for African-American and Hispanic listeners. Arbitron has insisted that its audience estimates are valid, even with the in-tab shortfalls, but it has agreed to guarantee hitting 6+ in-tab targets and says it will have an 18-54 proposal in a few months. That is not enough to satisfy the four client groups."Under any circumstance, we expect guaranteed in-tab delivery in the 18-54 age group for all age cells and across all ethnic groups, including Hispanics and African Americans," they said in the letter demanding action by Arbitron.
While agencies seem to have warmed to PPM more quickly than many broadcasters, they are also supportive of holding Arbiron’s feet to the fire on sample delivery.

"I applaud the broadcasters who have taken the lead in holding Arbitron to a higher standard. Up until now – the discussion has been PPM vs diary – with all of the dialogue centered around the weakness of the diary – and little attention paid to getting the electronic service right. The broadcasters have much to lose – with AQHs down some 30% or more with the conversion to PPM. It’s certainly easier for the Agencies -who will pay for performance either way – but for the broadcaster – there is much to be concerned about," said Natalie Swed Stone, OMD U.S. Director, National Radio Investment. "For anyone who had questioned the PPM – they were dismissed as either concerned about price-or not committed to change or the future. Now, it is evident that any concerns should have been and should still be taken seriously – Arbitron needs to be held to a much higher standard than the diary," she added.
More from the agencies in 11/16/07 RBR Ad Business Report


It is with the utmost urgency and objection that we, your customers, send you this letter.

All of us have been vocal supporters of the concept of electronic measurement in radio for several years – and we remain committed to the need for accurate, high quality electronic ratings as a way to program and sell our stations.  As of this writing, the PPM system has been implemented in two markets for several months, with one month of information available in New York. To date, PPM has not provided accurate or reliable data for all demographic groups.
We are calling on you to take immediate action to resolve this.

The most immediate issue is sample size – especially with regard to 18-34 year olds and ethnic groups. The situation is clear: To secure a legitimate representation of listener activity, the number of people participating in the PPM survey must be increased.

Your recent proposal to lower the number of market-level respondents needed to issue a valid report for a specific demographic is both specious and dangerous. This proposal could result in some stations doing business based on the activity of as few as a single – one – listener. Your own researchers have concluded that such a sample size "has a greater range of error than the size of the estimate."

There are many ethical and sound business choices that can be made by Arbitron here. One is to eliminate the 6-11 portion of the sample and reallocate those meters to participants in other demographics based on a 12+ population.

Under any circumstance, we expect guaranteed in-tab delivery in the 18-54 age group for all age cells and across all ethnic groups, including Hispanics and African Americans.

Please be aware that this is a critical and immediate issue for your customers undersigned and we are expecting an action plan to correct these matters within 30 days.

Clear Channel Radio, Cumulus Media, Cox Radio, Radio One Inc.

November 14, 2007
Mr. Steve Morris
Mr. Pierre Bouvard
Mr. Owen Charlebois
The Arbitron Company
142 West 57th Street
New York, NY 10019

RBR/TVBR observation: Adding PPM panelists may improve 18-34 in-tab and increase confidence in PPM ratings, but it may not change the general audience trends which have been consistent across all three PPM markets, as far as which formats go up and which go down. So, either the PPM methodology itself is fatally flawed, or it is indeed more accurate and radio is just going to have to learn to live with the new reality. For one thing, PPM has effectively redefined what constitutes radio listening. A 19-year-old with a PPM can log a lot of hours "listening" to the Oldies station that his boss has on at work, while he would not have reported that in a diary, since he didn’t consider it radio listening, just background noise.