Arbitron Delays PPM In NY, L.A., Chicago, SF, Dallas And Others

Delayed!

ARBITRON has announced that it will delay the commercialization of its Portable People Meter (PPM) radio ratings service in nine markets. NEW YORK, NASSAU-SUFFOLK and MIDDLESEX-SOMERSET-UNION will be delayed by nine months; LOS ANGELES, RIVERSIDE and CHICAGO by six months; and SAN FRANCISCO, SAN JOSE and DALLAS by three months.

PPM surveys in PHILADELPHIA and HOUSTON are unaffected by this decision. NEW YORK, NASSAU-SUFFOLK and MIDDLESEX-SOMERSET-UNION "pre-currency" data will continue to be released through AUGUST 2008 but only as monthly reports for research and evaluation purposes, but no in a format that can be used by software systems that have a scheduler module which is used for the buying and selling of radio station advertising.

Feedback from our customers, the Media Rating Council and other constituencies has led us to conclude that the radio industry would be better served if we were to delay further commercialization of the PPM ...

ARBITRON intends to introduce the PORTABLE PEOPLE METER service in ATLANTA, DETROIT, WASHINGTON D.C. and in subsequent markets, as originally scheduled.

Additionally, ARBITRON has revised its financial guidance for 2007. Earnings per share (diluted) for 2007 are currently estimated to be between $1.30 and $1.35 as compared to its previously issued earnings per share guidance of $1.35 to $1.45.

And, ARBITRON currently estimates the impact of foregone revenue and additional costs required to produce diary estimates in the affected markets will reduce 2008 earnings by $0.22 to $0.33 per share (diluted).

Paper And Pencil Diary System Use Extended

In these nine markets, NEW YORK, NASSAU-SUFFOLK, MIDDLESEX-SOMERSET-UNION,LOS ANGELES, RIVERSIDE, CHICAGO, SAN FRANCISCO, SAN JOSE and DALLAS, ARBITRON will extend the use of the paper and pencil diary system that has been serving the industry since 1965. During the delay, ARBITRON will continue to work with customers, the MEDIA RATING COUNCIL®, other industry organizations and community groups on the research and business issues related to the PORTABLE PEOPLE METER radio ratings service in local markets.

ARBITRON Chairman/President & CEO STEVE MORRIS said, "We remain confident in the audience estimates that the PORTABLE PEOPLE METER service is producing. However, over the past three weeks, feedback from our customers, the MEDIA RATING COUNCIL and other constituencies has led us to conclude that the radio industry would be better served if we were to delay further commercialization of the PPM in order to address their issues.

"We already have a number of initiatives in the pipeline for implementation in the first quarter of 2008 that we believe will improve the performance of our PPM samples. Our intention is to expand significantly this list of improvement initiatives by working closely with customers, industry organizations and community groups. We expect that the MEDIA RATING COUNCIL will be a particularly valuable source of guidance and advice on the more technically oriented aspects of this review and improvement process and we intend to work closely with the members of the MRC over the next several months."

MORRIS added, "We also plan to use the additional time to work closely with community leaders to review the workings of the PORTABLE PEOPLE METER service and to gather their insights as to how we might improve compliance among persons 18-34, including ethnic young adults, across the diverse communities of NEW YORK, LOS ANGELES, CHICAGO and subsequent markets."

The ratings for the SEPTEMBER 2008 PPM survey month (AUGUST 21 - SEPTEMBER 17) are scheduled to be delivered to customers on OCTOBER 8, 2008. The first "currency" survey month in LOS ANGELES, RIVERSIDE, CHICAGO, SAN FRANCISCO and SAN JOSE will be preceded by two "pre-currency" monthly PPM reports in JULY and AUGUST. In DALLAS, the two "pre-currency" months will be OCTOBER and NOVEMBER 2008. The first "currency" month in DALLAS will be the DECEMBER PPM survey month (NOVEMBER 13 - DECEMBER 10) scheduled to be released on DECEMBER 31, 2008.

Radio Responds

CUMULUS Pres./CEO LEW DICKEY, one of the four broacasters that sent MORRIS a demand letter for PPM changes, told ALL ACCESS, "Delaying the rollout is a prudent first step. Now they have to address the underlying sample quality issues, and set about fixing the problems."

ARBITRON ADVISORY COUNCIL Chairman and COX/GREENVILLE VP/GM STEVE SINICROPI told ALL ACCESS, "ARBITRON's decision to delay the commercialization of PPM in NEW YORK is a response to customer concerns about sample size, performance and compliance. Electronic measurement will be good for radio, but getting it right is more important than getting it now. Getting it right will provide confidence in the currency. The ADVISORY COUNCIL is looking forward to our meetings next week to learn more about ARBITRON's performance initiatives and what quality benchmarks will be needed prior to commercializing a PPM market."

Ad Agencies: Delay, But Don't Give Up On PPM

Meanwhile, support for the PPM from ad agencies continues to be strong, although there are some signs of slippage. An ADWEEK story found buyers who agree that a delay would be necessary to resolve the sampling and ethnic representation concerns. Yet just as many, if not more buyers think radio interests are overreaction to the problems, and the groups are "dragging their feet and complaining because PPM shows lower ratings for their stations, and will hold them more accountable."

CARAT VP/Reg. Spot Dir. DENNIS MCGUIRE told ADWEEK that using the PPM as a currency is "premature ... We need a couple more [PPM] books to see how the audience patterns start trending."

Yet MEDIAVEST SVP/Dir. Local Broadcast MARIBETH PAPUGA noted, "We're never going to make progress if we don't move ahead. The world is changing so fast, and nobody has the answer to what the right methodology is. And we'll never find out if we don't start testing in real time."

Read the complete story here.

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