New Arbitron CEO Intends To 'Win Back' Lost Clients

Michael Skarzynski

ARBITRON’s loss of CUMULUS and CLEAR CHANNEL in NOVEMBER -- the two companies switched to NIELSEN for radio measurement in smaller markets -- will cost the company $5 million in revenue this year, ARBITRON said during a conference call with investors this week.

ALL ACCESS and other members of the trade press were invited to the call YESTERDAY (2/18) to get to know ARBITRON's new Pres./CEO MICHAEL SKARZYNSKI, who joined the company this past JANUARY 12th. This call came on the heels of TUESDAY's earnings report and conference call.

We have a great reputation as a research company but maybe we can look at things in a more flexible manner.

During the call, he touched on the completion of ARBITRON's reorganization being completed by the end of Q1 and noted that there would be no significant layoffs, and that all areas of the company were affected by it.

SKARZYNSKI offered some perspective from his recent visits by phone and in person to over 60 ARBITRON customers. Some he admitted were not as friendly as others, particularly NABOB and SRA which consisted of more of a venting of displeasure over PPM sampling issues and proportionality, vowing to "take all of our customer feedback to our managers and address their concerns." 

Changing Corporate Culture

He reflected on some changes to ARBITRON's corporate culture: "There are many positive parts of our culture that we want to continue to emphasize and build upon such as the value and integrity of people and a desire to please customers. We are told by customers we are too slow. We need to be more responsive in our response time. We can make some changes to shorten those intervals for response. And we need to be more flexible. We have a great reputation as a research company but maybe we can look at things in a more flexible manner."

Taking a non-ivory tower approach, SKARZYNSKI said, "We're not perfect and have a genuine concern to help our customers, particular when revenues are falling as much as 15% per year. We need to be a cheerleader for the radio industry and help make this a $22 billion industry and point out the importance of radio as a medium -- its great reach. And we need to stand up on the table and say that radio deserves a greater portion of the advertising mix. Radio is a fantastic medium which can go beyond wireless and Internet -- being better and faster"

He noted that ARBITRON plans to extend its reach into new media -- specifically the three screens: wireless, TV, Internet, with new products and ratings analytics to allow radio to measure it's content across those three multi-media platforms as well as a wider look at International opportunities.

Diaries And Nielsen: What's Arbitron To Do?

ALL ACCESS asked MICHAEL: ARBITRON clients in diary markets have expressed concern that the company is focused too heavily on its metered markets and that the diary markets have taken a back seat. With NIELSEN now in force in a number of these diary markets, do you see any changes in the diary model?

"We are making several improvements to our diary markets -- adding cell-phone-only households in all diary markets by FALL 2009 -- and in 151 diary markets accelerating this into SPRING 2009. This will improve proportionality of the 18-34 segment, and we are changing incentives to get better 18-34 participation.

"And, we are enhancing qualitative and consumer research portions of the diary too. In cases where we are not getting diaries back we are going to bug them with phone calls to have them engaged with improving sample sizes. And, we are working on eDiary and alternative methods for gathering audience measurement. We are investing in diary markets -- and we believe in their importance.

"NIELSEN entered the small market arena with sticker diaries last year. They were invited in by our CUMULUS and CLEAR CHANNEL customers. Quite frankly, ARBITRON dropped the ball. We have apologized to CUMULUS and CLEAR CHANNEL and we are going to win and wrestle back that business." 

ALL ACCESS: Clients in PPM markets have told us that the smaller AQH rating and persons numbers are causing them to lose revenue. No matter how hard they try, agencies and buyers don't seem to understand the conversion. With the economy where it is, what is ARBITRON doing to help radio hold rate, when PPM shows a decline in AQH listening?

SKARZYNSKI answered, "You have to talk about specific cases but we're doing in-person coaching, general training and recruitment -- to make sure our PPM clients are in compliance and understand the methodology."

ARBITRON SV/Press & Investor Relations THOM MOCARSKY, who was on the call, added, "We have a whole set of trainers working within the agencies and it's taking a bit of time for this to happen, but we are making progress."

Concluding, SKARZYNSKI said, "We have tools today like TAPSCAN and MAXIMI$ER and many new products including new software applications and extensions to launch. And, PPM will eventually be available on smaller devices like cell phones and laptop computers."

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