Exact details are yet to be worked out, but Arbitron has told clients it will reduce their bills if it fails to hit targets for Portable People Meter (PPM) sample sizes. Arbitron is also working on a new campaign to explain the math of PPM to media buyers, many of whom haven’t been buying into the claim that 70 GRPs under PPM are equal to 100 GRPs under diary measurement.
In his letter, Arbitron CEO Steve Morris conceded that the company is not hitting its sample targets in Houston and Philadelphia, the first two PPM markets, although he still insisted that the audience data are statistically reliable. But he agreed to establish guarantees and reduce bills to broadcasters if they are not met. "We understand that you want us to have some ‘skin in the game’ when it comes to our sample targets. Therefore, as of October 1, 2007, we will implement a PPM sample guarantee in which we will provide a deduction from your monthly bill if we fall below a minimum threshold of our 6+ Metro sample size target for the panel," Morris wrote, saying Arbitron will be working with the Arbitron Radio Advisory Council (RAC) on specifics of the guarantee plan.
RAC chairman Steve Sinicropi of Cox Radio, pictued, told RBR the letter is a step in the right direction and that the guarantee will make in-tab performance as important to Arbitron as it is to broadcasters. "All of us want more confidence in the currency. Hitting targets lets us all have more confidence in the currency – both buyers and sellers," Sinicropi said.
As for those buyers, Arbitron is pledging to step up efforts to educate ad buyers on the changes necessary to buy radio under PPM, rather than diary measurement. "Remember this formula: 70 PPM (‘meter’) GRPs can equal 100 diary GRPs," reads a headline in a draft of an ad that Arbitron is preparing to run in advertising industry trade publications.
Sinicropi said there is still a lot of confusion among buyers, which is something we have heard from other broadcasters as well. "What has changed is the measurement, not the underlying value," Sinicropi said, noting that a lot of work remains to be done to get that message out as PPM rolls out to eight more markets through the end of 2008.
RBR/TVBR observation: Broadcasters would rather have Arbitron hit the sample targets than rebate their ratings bills, but this guarantee at least gives Arbitron an additional incentive to hit those targets. "With Arbitron, the devil is always in the details," said Cox Radio CEO Bob Neil in an email we received about the Arbitron letter. Neil, who has been a long-time skeptic about various aspects of PPM, called the 6+ sample guarantee "a joke," since radio really needs every major demo to come in on target. "That is what we are paying for," he said. As for the problem with buyers not adjusting GRP targets for PPM, we doubt that a few magazine ads are going to suddenly get everyone to change their numbers. This is going to be a tough education process and it has to go up the chain to planners and ad agency executives who are now planning budgets for 2008. We doubt that many buyers have the authority on their own to revise the GRP target numbers for a planned buy because the market has switched from diaries to PPM.