Arbitron Advertiser/Agency Advisory Council wants PPM encoding
Look out Radio One and Clear Channel: The Arbitron Advertiser/Agency Advisory Council announced a resolution yesterday strongly advising radio stations encode their signals for PPM measurement. Philadelphia is the first market to turn on the service (1/11) and so far, CC Radio and Radio One are still holding out there and had no comment on the resolution. We mentioned agencies like Carat are likely to boycott non-PPM encoding stations (12/27/06 RBR #249).
Perhaps this is the first agency warning shot over the bow. As we had said, it seems this is just deal posturing for CC Radio, because the encoding equipment is provided free of charge. We think holding back on PPM encoding hurts the industry as a whole. In addition, if a station in a PPM market is not encoding, they're essentially an unrated station. Stations that go unrated in PPM markets and choose not to subscribe may give agencies the upper hand in negotiations.
Said Kathy Crawford, MindShare President/Local Broadcast, one of the agency folks who approved the resolution: "The resolution was written to vocalize what has already been said to the radio industry, which is that accountability is the name of the game and this is a far better method of accountability than the diary method. And the fact that a lot of stations in these markets have decided they're not going to encode is penny-wise and pound-foolish."
Said Brad Adgate, Research Director, Horizon Media, another agency buyer who approved the resolution: "I think this is long overdue and it's inevitable. Marketers just want greater accountability, more accurate ratings. Radio listening hasn't changed. It's how the data is being collected. If the data is being collected more accurately, I think that's better. And if it turns out that AM Drive doesn't have the same ratings as with the diary, but there's a higher cume, then perhaps there needs to be a re-education process that the industry needs to re-evaluate radio with the new currency."
He adds, "Marketers don't have any hesitation looking more closely at other opportunities to spend their dollars. So I think that radio as an industry should do the best they can to put it on a more level playing field. I think it's incumbent upon them to have more accurate audience data. The 20 billion dollars spent yearly in radio are held by the marketers. The buying community is in charge of that and they're adamant, in the meetings I've done with Arbitron. They are past the debate."
Adgate also pointed out that PPM provides the ability for commercial ratings, another very important request from agencies on the television side.
Joel Hollander, Chairman and CEO of CBS Radio, the first major broadcaster to sign up for PPM, applauded the AAAAC's resolution and reiterated his support for the technology. "Our clients are demanding the accountability the PPM can deliver. It is imperative that we move forward as an industry and work together to enhance the overall value of radio."
The resolution's wording and Council member list
Said the resolution: "The electronic nature of the PPM provides better measurement of radio audiences than is possible with today's pen and paper diary methodology. This electronic dimension generates a greater level of accountability - something that is absolutely critical to radio's future. The Arbitron Agency and Advertiser Advisory Council believes that all radio stations in each of these markets should encode their signals for PPM measurement. Whether the station elects to subscribe to the service is a decision that is clearly theirs. However, we believe that it is imperative for each station to encode, especially since there is no cost to the station for encoding. This will give advertisers, marketers, agencies, and stations, the ability to understand and better evaluate radio in the new world of electronic measurement.
We encourage all broadcasters in each upcoming PPM market to step forward and embrace the future and electronic measurement by beginning to encode immediately."
The resolution was approved and endorsed by the Arbitron Advertiser/Agency Advisory Council whose members are:
Brad Adgate, Research Director, Horizon Media
Mary Barnas, Director of Spot Radio and Spot TV, Carat North America
Joe Caponigro, SVP/Executive Media Director, WestWayne Inc.
Vicky Champlin, Director, Media Planning, Busch Media Group
Julia Chen, Media Director, IW Group
Kathy Crawford, President of Local Broadcast, Mindshare
Jim Elms, Senior VP/Media Director, Barkley Evergreen and Partners
Linda Jefferson, Senior VP/Media Director, Burrell Advertising
Sue Johenning, EVP/Director of Local Broadcast, Initiative
Mark Kaline, Global Media Manager, Ford Motor Company
Larry Kelley, EVP, Director Media/Research, Fogarty, Klein & Monroe
John Maher, SVP, Director of Planning, US International Media
Ken Martin, VP, Group Media Director, Dodge DAA Planning, PHD Los Angeles
Shannon Pederson, Local Media Manager, SFAFT
Kate Sirkin (Lynch), EVP Global Research Director, Starcom Worldwide
Michael Trujillo, VP, Media Planning Director, Casanova Pendrill Publicidad
