SIX GROUPS SAY PPM 'DOESN'T MEET EXPECTATIONS' Mike Boyle – Radio and Records Clear Channel Radio, Cumulus Media, Radio One, Cox Radio, Inner City Broadcast Holdings, and Saga Communications sent a letter to Arbitron executives on Friday (June 20) citing their expectations and concerns about the Portable People Meter (PPM) on the heels of Arbitron's recent decision to move forward with its commercialization.
In a continuation of a campaign started by Cox and Inner City in May, with Saga joining earlier this month, the six group heads say in their letter that regardless of Arbitron's recently cited improvements in PPM sampling they are still left with numerous concerns about the new electronic ratings measurement system: "Speaking as the vast majority of the industry our confidence in the system has not been fully restored."
The letter includes four areas of improvements (see below) that the broadcasters say Arbitron needs to make with PPM to regain their confidence, although the ratings company's clients do not specify what they will do should Arbitron not respond to their satisfaction.
"We understand the need for and remain ardent supporters of having a high quality electronic ratings measurement tool for the radio industry," the letter concludes. "But, what Arbitron has produced to date does not meet our expectations of a high quality measurement tool. Therefore, we anticipate your expedient resolution of the items outlined on the following pages."
The four areas where broadcasters seek PPM improvement:
1. 18-54 sample size /sample size guarantee
Status: Your providing a “sample guarantee” at 80% of the markets sample target effective with the third month of currency, backed by a financial rebate. There’s also a plan to move some of the current 55+ sample into 18-54 – no hard date for implementation.
Industry expectation: 100% delivery of 18-54 target beginning with the first month of currency, including the sample guarantee with a financial rebate.
Justification: 18-54 age cells are used for the vast majority of radio’s buy/sell transactions. We expected to get 100% of the sample size when we bought PPM; as more markets roll-out this issue will become even more critical in smaller markets since Arbitron’s starting sample targets decrease.
2. 18-34 sample sizes (All demos including ethnic)
Status: You’ve set benchmarks (not financially backed guarantees) for sample target delivery. These include 70% in a market’s first year of measurement and 80% in year two. Adults, men and women are covered – as well as Black and Hispanics in markets where they exceed 10% of the population. “Other” 18-34 is also covered if Black or Hispanic exceeds 10%.
Industry expectation: A much steeper improvement ramp; leading to 100% delivery in the form of sample guarantees backed by financial rebates, not benchmarks. This would include all demographic groups as described above. The following sample target guarantees make more sense to the industry:
6 months - 80% 1 year - 85% 18 months - 90% 2 years - 100%
Justification: We expected full sample size delivery when we signed up for PPM – and had a right to. Getting 80% of that number two years into the deal is unacceptable. Failure to fully meet these targets makes it difficult, if not impossible to evaluate a stations success or use the data to transact business.
3. Children's (age 6-11) measurement
Status: Children 6-11 comprise approximately 10% of the meters in the PPM sample. We have repeatedly requested these meters be re-allocated to persons over the age of 12. Arbitron has been steadfast in its reluctance to do so citing “cost considerations, IT issues, and interest from a number of customers in 6-11 year old data.”
Industry expectation: All PPM markets that commercialize (i.e. first month of currency) after January 1, 2009 will have panels that 1) consist only of Persons 12+ 2) are no smaller than the currently scheduled sample target. In addition beginning January 1, 2009 6-11 year old measurement will be phased out in existing PPM markets through panel turnover. As households leave the panel in these markets they will be replaced by those that provide meters only to persons 12+.
Justification: When PPM sample size targets were calculated at approximately 33% of the markets diary level, you converted a 12+ diary figure to a 6+ base in PPM – meaning we didn’t get a full 33% conversion into 12+ PPM meters. Adding the 6-11 year old meters back into a 12+ base will correct this, and expedite the building of 18-34 and 18-54 sample sizes. Children 6-11 measurement is a remnant of your proposed joint venture with Nielsen; the vast majority of the radio industry never asked for, never wanted and still has no need for it.
4. MRC Accreditation for Radio First methodology prior to commercialization
Current status: You’ve been consistent and resolute; no waiting for accreditation before making PPM currency in all markets beyond Houston. We recognize this aligns with the MRC’s Voluntary Code of Conduct.
Industry expectation: Our expectation is that you will achieve MRC accreditation for the Radio First PPM methodology on or before June 30, 2009. If accreditation is not received by the deadline, the Houston “best practices” methodology will be installed in all markets rolled out going forward. In addition, Arbitron will take the steps necessary to put the current Houston methodology in all existing PPM markets at no additional cost to all existing PPM subscribers.
Justification: The industry is not asking for every market to gain accreditation prior to currency – only that the Radio First PPM system gains accreditation ONE TIME before currency implementation. Also, the diary and Houston PPM methodologies have accreditation; all radio markets should be using an accredited product. This is a reasonable expectation given the critical importance of the data to our underlying business and the substantial increases in rates that accompanied the rollout of PPM. Finally, the MRC code of conduct doesn’t require accreditation prior to currency, but does prefer it: “The MRC prefers that a Participating Measurement Service seeking to replace an accredited currency measurement product with a new currency measurement product (both products provided by the same Participating Measurement Service) uses best efforts to obtain accreditation of the new product prior to its commercialization.”
Contacted by R&R on Monday morning (June 23), Arbitron senior VP of press and investor relations Thom Mocarsky said the company has no comment at this time on the letter from the six radio groups. |