The 'Ratings Compression' Discussion Continues...
The Research Director, Inc. Responds
June 10, 2014 at 4:44 AM (PT)
Last week (NET NEWS 6/5), RESEARCH DIRECTOR, INC. Pres. CHARLIE SISLEN wrote in ALL ACCESS, "There has been a perception that ARBITRON’s (now NIELSEN) transition to PPM in the country’s largest markets has resulted in ratings compression. It is a hard idea to refute when you look at an AQH rating ranker and find multiple stations tied with a 0.5 (for example), and often only 0.1 or 0.2 of a rating point can separate a dozen radio stations in a given market. If you accept the notion that perception is reality, then all of these stations are tied, and on a cost-per-point basis there is no difference."
SISLEN added, "We at RESEARCH DIRECTOR, INC. do not intend to argue whether or not ratings compression exists. Instead, we would like start a conversation about how it affects our industry."
Now, RADIOCRUNCH Partner ANTHONY ACAMPORA adds his thoughts to the ratings compression conversation, writing to ALL ACCESS, “It’s good to see CHARLIE speak out about the potential ramifications. It’s certainly something we as an industry need to address. NIELSEN has really worked hard this year to improve sample sizes. We still have some ways to go but 2014 will probably be more adjustments to our panels than ever before (in a positive way). Add in continued changes from language preference and just radio usage changes, and we’re seeing some markets with major rank changes. These are the biggest changes to formats we’ve seen since PPM launched (which many people felt made radio move toward the middle and hurt niche formats).
“Adding a decimal point might be a good idea, however, we need to take PPM for what it is: actual listening and stop with AQH. In the diary world, it made more sense for AQH. However, now the time has come to go to minute by minute. If we have the data that shows someone listening for 5 minutes, let’s credit them for 5 minutes, not 15. If they listen for 4 minutes, we get none. That has created a lot of manipulation by programming to try and get the 5 minutes with bow tie stop sets, et al. It would serve our clients better to give them minute by minute, so our programmers and talent actually get rewarded for great content – not how well you play the meter.
"In addition, we need to address the concept of Prime. PPM has shown more listening to certain formats at night and especially on SATURDAY. Why do we continue to discount some really 'prime' real estate on the weekend? If we went to minute by minute, we’d probably see ATE be a lot closer than it is and that would reduce the heavier meters. Would we have maybe even more compression? Certainly possible. But then it makes complete sense to do what CHARLIE suggested and add a decimal point to AQH rating.
"Just the increase in sample and the efforts by NIELSEN to improve that should be applauded. Now, if we can continue to look at the methodology of how we get there, we might be able to really give rewards to our hard working talented people for a job well done."
Charlie Sislen & The Research Director, Inc. Continue The Discussion
"We at RESEARCH DIRECTOR, INC. appreciate ANTHONY ACAMPORA's added insight to our recent industry discussion about ratings compression and we agree with several of his points. However, we feel that the conversion from average quarter-hour based estimates to those based on average minute would have a disastrous effect on the radio business. While some programmers could find weighted minute-by-minute data useful, it would have a detrimental impact on radio revenue.
"As outlined in our article, (NET NEWS 6/5), AQH ratings are the currency used to price radio's commercial inventory. When ratings in CANADA went from AQH to average minute, the average rating fell. We have already seen what happened in the U.S. when the ratings were adjusted due to the conversion from diary to PPM. Average unit rates declined. The belief that advertisers/buyers would adjust their cost-per-points to reflect the new measurement yardstick was never fulfilled. We do not see why we would expect advertisers to adjust now if we switched to average minute ratings. For that reason we strongly believe it is in the radio industry's best interest to stick with the current AQH based currency."