After looking at the first month of PPM data from Philadelphia, Bear Stearns analyst Victor Miller says radio may have to rethink how it sells itself to emphasize the greater audience reach than was ever reported by diaries. For one thing, he notes that Clear Channel's Philly cluster fell from #1 to #3 in ratings under PPM, but was still #1 in total cume. Comparing the March 2007 PPM data to the Winter 2006 ratings book (the last under diary methodology), Miller found that ratings were down for 24 of the 27 major stations in the market, with Greater Media's WMMR-FM the lone gainer and two stations flat. The Clear Channel cluster saw ratings decline 46%, Radio One 50% and CBS Radio 19%.
The big declines for individual stations were CC Radio's Tropical WUBA-FM, down 60%, and Urban AC WDAS-FM, down 54%, and Radio One's Gospel WPPZ-FM, down 60%, and R&B WRNB-FM, down 57%. "Arbitron's prior PPM tests in Philadelphia and Houston had shown the African-Americans and Hispanics had over-reported radio listening under the diary method. However, the magnitude of the ratings declines at Urban and Spanish-language stations is surprising," Miller said in his analysis.
But the cume story is a good one, with total cume for the Philly market up 82%. WJBR-FM, which Beasley just acquired from NextMedia, saw its cume jump 384%, although the station is officially in the adjacent Wilmington, DE market. The big in-market gainers were Jerry Lee's WBEB-FM and CC Radio's WISX-FM, each up 193%, with CBS Radio's WOGL-FM close behind at 192%.
"The cume data shows that radio stations have been underselling their reach to advertisers," Miller told investors, while diarykeepers had been over-reporting TSL. "Radio has a much better 'reach' story to tell, but with listeners listening to more stations for a shorter period of time, sellers of radio ad time may have to adjust their approach to how they sell or position their stations in the market," the analyst said.
RBR observation: This is the new world. Get used to it. We've heard varying reports on how ad buyers are adjusting to the new numbers resulting from PPM. Stations may have to stand their ground and turn down some business if some of those buyers insist on applying diary CPMs to PPM ratings.