First New York, now New Jersey jumps into PPM investigation


The Attorney General of New Jersey, Anne Milgram, yesterday announced that her office had issued a subpoena to Arbitron, seeking essentially the same information already sought by her counterpart in New York, Andrew Cuomo. Milgram says she is investigating whether Portable People Meter (PPM) measurement of radio listenership in New Jersey “is flawed, statistically unreliable and undercounts the listening habits of minority consumers.”

“The PPM is being promoted by Arbitron as a tool for gathering data on audience listening habits, which is then used to determine market share. For commercial radio stations, market share is directly tied to advertising revenues,” the announcement from the New Jersey AG stated.

“When sampled in the Philadelphia-New-Jersey and New–York-New Jersey markets, the PPM methodology was denied accreditation by the Media Ratings Council, a non-government entity that tests audience ratings for media. In addition, in markets where the PPM system has been sampled, ratings for minority stations have declined.

Among other things, today’s subpoena seeks documents concerning the sampling of Arbitron’s PPM system in the Houston, New York, Philadelphia and New Jersey markets, submissions by Arbitron to the Media Ratings Council regarding accreditation, and correspondence between Arbitron and advertisers or radio broadcasters regarding implementation of PPM,” Milgram announced.

Arbitron’s response to the Milgram subpoena was the same as to Cuomo’s – “Arbitron PPM services are valid, fair and respresentative of the diversity of the radio markets measured.”

The company repeated its argument that the Media Rating Council (MRC), is the only proper forum for examining the PPM methodology.

“Once again, the media industry should be concerned about these continued political encroachments on the valuable role that the Media Rating Council fulfills. The MRC oversees a well-established, widely-accepted process that has served television, radio, print, Internet and other ad-supported media for more than four decades.  The MRC has also been a driving force behind the important and continuing quality improvements in the ratings services that the media industry counts on,” said Arbitron CEO Steve Morris.

Several Hispanic and African-American radio companies and their respective trade groups have asked the FCC to conduct an investigation similar to what the AGs are doing. Comments on their petition to the FCC are due later this month.

RBR/TVBR observation: While it’s tough to make the case that the FCC has any authority over radio ratings, although it is being urged to launch its own probe, the state attorneys general certainly have authority to investigate any allegations of fraudulent business practices. But absent any smoking gun, such as evidence that Arbitron is trying to hide problems with PPM, do they really have any authority to determine whether the ratings methodology is good, bad or mediocre? That is also a tough case to make.