Two State Attorneys General Sue Arbitron Over PPM

The Point Of Contention

The stakes over the OCT. 8th PPM rollout have been raised exponentially, as two state Attorneys General have filed suit against ARBITRON. NEW YORK Attorney General ANDREW M. CUOMO's lawsuit accused ARBITRON of deceptively claiming that its PPM system is valid, fair and representative of diverse radio markets. It also charged ARBITRON with failing to disclose important flaws in the PPM methodology to broadcasters, advertisers, shareholders and the public, including serious shortcomings in the accuracy of the new system and its inadequate representation of African-Americans and Latinos. Those sentiments were basically echoed by NEW JERSEY Attorney General ANNE MILGRAM.

"ARBITRON’s rush to commercialize the PPM system without curing known flaws in the service distorts the marketplace and threatens to drive minority broadcasters out of business. ARBITRON must refrain from using this flawed product in NEW YORK until it is truly a reliable and fair service," CUOMO said.

"The existence and survival of radio stations is premised on advertising revenue, and advertisers rely heavily on ARBITRON’s ratings in deciding where to place advertisements," MILGRAM said. "The state’s position is that these new, unreliable ratings being generated by ARBITRON severely harm those radio stations serving minorities, as well as minority listeners themselves."

According to papers filed by Attorney General CUOMO, ARBITRON deceived broadcasters, advertisers, shareholders and the public by:

- Misrepresenting that PPM is valid, fair and representative of the diversity of the NEW YORK radio market;

- Failing to disclose in selling ratings based from PPM that the service has serious methodological flaws;

- Creating the false impression that PPM is generally accredited by the MEDIA RATING COUNCIL (MRC), when it was denied MRC accreditation in NEW YORK;

- Misrepresenting that PPM methodology in NEW YORK meets the MRC’s "Minimum Standards" for commercial use, when it does not; and

- Misrepresenting that it strictly adheres to the MRC’s Voluntary Code of Conduct, while failing to adhere to important code preferences.

The lawsuit accuses ARBITRON of failing to disclose or cure key flaws in its PPM methodology in NEW YORK.

The lawsuit also alleges that ARBITRON’s executives commercialized PPM before it is ready in order to reap financial benefits without regard for its impact on broadcasters or the public, or for the long-term interests of ARBITRON.

ARBITRON has been contacted for a response; expect to see one once the company analyzes the filing.

Reaction: Clear Channel "No Comment"

ALL ACCESS has learned that CLEAR CHANNEL is not commenting on the PPM lawsuits, as has been customary of late. The last time CLEAR CHANNEL RADIO Pres./CEO JOHN HOGAN did comment, he reminded everyone that CLEAR CHANNEL is a stanch advocate of accurate, real-time and cost-effective electronic measurement. And, at some point most of RFP committee turned their attention from finding an alternative to ARBITRON, to figuring out how to best compete under the PPM system.

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