Boyle: Spinning Aside, Houston Data Helps PPM's Case
October 13, 2008 at 3:13 PM (PT)
In a Flash Point newsletter released last THURSDAY to subscribers, C.L. KING analyst JIM BOYLE took both ARBITRON and its Spanish and Urban radio critics to task for spinning the PPM data to prove their respective cases. However, the success of HOUSTON's Urban station -- verified in TODAY's release of the SEPTEMBER PPM data -- seems to be the tipping point for BOYLE to side more with ARBITRON.
"One could argue both sides are right given their slicing-and-dicing of the electronic audience measurement that is inherently and widely believed to be more accurate than paper diaries invented 50 years ago," the report noted. "Investors should care more about the final users' opinion and statistical science. ARBITRON's PPM wins with the all-important former aspect, the ad community end-users. For now, the data seems to bolster ARBITRON's PPM with the latter aspect, but it is not open-and-shut case yet."
Radio One started with huge PPM ratings drops ... After several operational and programming changes, the Houston stations' PPM ratings had rebounded sufficiently ... That's tough to argue against.
BOYLE acknowledged one of the PPM critics' main bones of contention. "The critics point out that ARBITRON has long been known for putting out selective data to present itself in the best light," he wrote. "In this case, the anti-PPM radio execs state that ARBITRON often uses audience 'Share' levels rather than 'Rating Points.' As well as using cume levels that present a different picture. The opponents declare ARBITRON is just showing a panel representation that helps ARBITRON, but hides the actual ratings decline which is substantially worse for minority stations. The critics rightly point out that historically and currently the ad community buys radio by AQH rating points not by cume share. However, cume or 'reach' is how newspapers and TV ad schedules are bought."
Their first bottom line: "ARBITRON's PowerPoint was assuredly a self-interested document despite its abundance and breadth of data. Our caveat was there was more data, some of which could bolster the other side."
PPM's Still Better Than A Diary
BOYLE then proceeded to make the case that flaws and all, the PPM is still an improvement over the diary. "When the opponents of PPM compare electronic audience data to paper diary data, it presumes the diary data is less flawed or comparable to the electronic PPM data. The end users, the ad agencies and advertisers, believe the diary data is much more flawed than the new, imperfect PPM data that the ad community thinks should be further improved [and] refined ... The lack of electronic data doesn't help radio pitching against other media with perceived much better research data.
"Although we have never seen definitive research that shows the magnitude or proof that diary methodology may favor minority stations due to diary recruitment over-sampling and listener tendency to 'vote' for their favorite station, it is quietly believed in portions of the industry," the report continued. "That would be one potential explanation for the more severe drop for niche-format stations under PPM. A negative bias is not being introduced, but a positive bias is being removed. This is a heated often subjective debate."
BOYLE noted that it may be time for radio to change its sales paradigm. "PPM may hurt all formats' AQH ratings, but PPM typically improves most cume or 'reach' for radio stations by 50%-100%. If radio sold reach instead of frequency, the beneficial result is that is where most of the really big ad budget buys are based on, radio in two or three years might have a better revenue growth prospect. With PPM you could say,'My radio station(s) reach the same or more as the big local TV station or newspaper and we're over 50% cheaper" than the paper or TV.'
The Deciding Factor: Houston
The tipping point to BOYLE's overall perspective on the PPM comes in the HOUSTON data. "It appears ARBITRON wins on PPM panel balance and that PPM opponents can win on initial disproportionate PPM ratings plunge. However, going back to real-life case studies, the RADIO ONE stations rebound makes the claims of pervasive doom from PPM for most minority stations is not wholly accurate ... RADIO ONE, which is the largest African-American radio group with typically Urban-formatted stations, started with huge PPM ratings drops, which knocked their stations' rank from the market leaders. After several operational and programming changes, the two HOUSTON RADIO ONE stations' PPM ratings had rebounded sufficiently to be back among the ranks of the leading stations, for a concrete example.
"That's tough to argue against. It would seem if one claims PPM is inherently and widely prejudicial against minority stations, even if PPM is electronic and passive, even if the panel is ethnically-balanced -- when one can subsequently point to examples that suggest stations of all formats can readily adapt their clocks, stopsets and their DJ patterns to try to improve their ratings as was shown to date in real-life."
BOYLE's observation rang true again in TODAY's release of HOUSTON's SEPTEMBER PPM data. Urban AC improved in the three-week survey (the fourth week was lost to HURRICANE IKE) from 6.0-6.2, becoming the #1 station in the market. The three Spanish-language stations in HOUSTON -- Spanish Contemporary KLOL and Regional Mexican outlets KLTN and KTJM -- saw their cumulative numbers grow from 11.3-11.9.
More of HOUSTON's SEPTEMBER PPM data can be found here.
AG Lawsuits: No Surprise
In BOYLE's eyes, the HOUSTON PPM data is going to make the NEW YORK and NEW JERSEY AGs case more difficult to prove. He told ALL ACCESS that their respective filing was somewhat predictable. "The NY AG had already sent his letter over a week ago threatening suit, and so he merely followed through with the expected laundry list of allegations," BOYLE wrote. "The NJ AG jumps on the bandwagon with similar allegations .. so not new news. They still have to have a statistical smoking gun and it has to meet a high threshold."
PPM Coaltion And Univision -- Sending Mixed Signals
Ironically, UNIVISION, which is part of the PPM COALITION fighting against the rollout of PPM, recently sent out a press release (9/10) touting the success morning host PIOLIN by citing PPM monthly data in LOS ANGELES, SAN FRANCISCO, SAN JOSE and CHICAGO. A request for comment from the PPM COALITION and UNIVISION regarding the mixed signals about PPM has been made. Response is pending.
This prompted BOYLE to note that all radio groups are basically being forced to use PPM data for lack of an alternative. "There are no diaries in NYC, so if ad agencies or advertisers doesn't use PPM, what do they use? Are they likely to use nothing? Are they likely to use paper diary ratings from six months ago when there were some different DJs and shows, et al?"