Clear Channel wants high-tech ratings; Arbitron applauds move
Saying diaries are out of date, Clear Channel is issuing a request for proposals (RFP) to create a new system of radio ratings for the US. Arbitron was quick to welcome the move, saying it will deliver a plan next month to CCU and the entire industry to "fast-track" its Portable People Meters (PPM) for radio ratings as soon as April 2006.
"Radio is a powerful, effective medium whose influence and reach have been underreported and diluted. In discussions with other radio groups, it's become clear that a different approach is needed to find an industry-wide solution. We want to investigate those options. Every time radio's performance and value is measured accurately, we absolutely shine," said John Hogan, CEO of Clear Channel Radio. Indeed, a Clear Channel spokesperson says the company is not doing this alone, but will confer with other broadcasters and representatives of major advertisers and agencies to find an up-to-date ratings system for the radio industry. The RFP was sent out yesterday and Clear Channel is hoping to receive responses within 3-6 months. The company isn't saying how many firms received the RFP, but it is confirming that Arbitron, Nielsen and Eurisko were among those contacted - - but others as well, "because there are a ton of companies out there who do consumer research," the spokesperson noted.
Arbitron immediately leaped onto the Clear Channel RFP as a way to press for implementation of its PPM ratings system and applauded Hogan and Clear Channel for taking a lead role to move to electronic measurement. "In July, we will present to Clear Channel and to the radio industry a 'fast-track' proposal that could deliver Portable People Meter (PPM) radio ratings in the US as early as April 2006. What we will unveil next month is a 'radio first' PPM rollout plan. This plan will give radio the earliest possible benefit of an electronic ratings system while allowing other media the option to participate at a later date," said Arbitron CEO Steve Morris.
RBR observation:
You may remember that Clear Channel issued an RFP for a new radio ratings system a few years back, when then CC Radio CEO Randy Michaels was locked in a contract renewal battle with Arbitron. But that ended with Clear Channel renewing with Arbitron. Similarly, Infinity last year vowed to back the launch of a new ratings system, but also renewed with Arbitron after going just a few weeks without ratings data. But while this new RFP may be, at least in part, a negotiating tactic to squeeze Arbitron on PPM pricing, having CC Radio declare its support for an electronic measurement system may accelerate the move away from diaries. It's well known that there are three competing systems for passive, electronic audience measurement - - Arbitron's PPM, the Media Monitor from Italy-based Eurisko and the MediaWatch from GfK/Telecontrol in Switzerland. It's unlikely that anyone else is going to have a working device ready to go in less than six months, so any potential US competitors to Arbitron are likely going to have to align with one of the two European companies. All three devices are based on recognizing audio sources. PPM requires encoding by the station, while the other two use audio sampling to match against monitoring of station broadcasts. The MediaWatch, which is worn like a wrist watch, was handed a setback a few months ago when it did poorly in tests by the UK's RAJAR ratings consortium. GfK/Telecontrol has disputed those results, but its system is out of the running as RAJAR continues testing PPM and Media Monitor, both of which have panelists carry devices the size of a pager.
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