Some Wall Street analysts have expressed concerns that Emmis, with some of its largest stations in Urban formats, could take a hit as Arbitron rolls out PPM to its markets, with New York now in pre-currency mode and the next market set to go live with PPM measurement. Emmis Radio Division President Rick Cummings has been leading an effort by Urban radio stations to educate ad planners and buyers about the switch to PPM. He insisted in the company’s quarterly conference call that PPM will turn out to be a plus for Urban stations. Cummings said the first objective is to explain that nothing has really changed. "The audience isn’t smaller. It’s just as loyal, just as big – in fact, PPM shows that the audience is actually bigger on a cumulative basis – but it’s a different measurement system. So 100 points in the diary world equals 70 points in this new system. It’s like going from Francs to Euros or kilometers per hour to miles per hour. We’ve got to teach the buyers that first. Then the second thing we have to teach is that 100 equals 70 in the general market, but with Spanish-language and Urban stations it is more like 60. There’s no change in the size of that audience. It’s a different measurement system." The only thing new, he insisted, is that stations whose heavy listeners over-indexed in diary measurement are not going to over-index as much in a PPM world.
What PPM adds is that you can really identify who is listening to a particular station and who is not. That means that radio stations can now prove things to advertisers that could not be demonstrated with diary data. "For example, the theory that you could reach the African-American audience with general market stations. It cannot be done. And now we can show that," Cummings said.
RBR observation: At one point, Cummings mentioned the report out from an Arbitron executive last week that a third-party tracking service has found that "rates" are up in Philadelphia under PPM. We are not surprised that cost per point is up 20% or more. How could it not be, when an audience that used to constitute 100 points is now 70 points? Just to get back to even you would have to increase CPP by nearly 43%.