Arbitron Extends 18-54 Sample Target Increase Timeline

Bill Rose

It's been quite a busy day for ARBITRON. After insiders told ALL ACCESS that the ratings firm was backing away from its APRIL 2009 promise at the RADIO ADVISORY COUNCIL (NET NEWS 4/30) to raise three of its PPM sample quality benchmarks and its average in-tab sample targets for cell-phone-only households, ARBITRON revealed its implementation strategy to increase sample sizes in its PPM markets.

To clear up the confusion of what seems to be conflicting news, ARBITRON SVP/Marketing BILL ROSE told ALL ACCESS that the company will meet its 12+ goals, but take a bit longer to do so; that it will reassign a bit of its 10% increase to bolster smaller market PPM samples; and that the earlier report about "backing away" from benchmarks was misleading. The way ARBITRON sees it, missing a benchmark one month doesn't mean it's giving up on the benchmark; rather it will prompt the company to do more to meet the benchmark in the following month.

The Company now plans to increase sample targets by 10% in the Persons 18-54 demographic by mid-year 2011.The increases will be phased in over time. The plan will increase its overall sample targets for Persons 18-54 by 8% by year-end 2010 and by an additional 2% by mid-year 2011, representing an aggregate increase of 10% by mid-year 2011.

The Company also plans to maintain a minimum sample target of at least 750 active panel participants aged 6+ by mid-year 2011 in substantially all PPM markets. Again, the increases will be phased in, raising the sample targets to 700 active panelists by year-end 2010 and 750 active panelists by mid-year 2011.

ARBITRON plans to increase the minimum sample target for MEMPHIS and PROVIDENCE to 675 by year end 2011, starting with 630 by year-end 2010 and 675 by year-end 2011. Clients in these two markets did not elect to take advantage of a previously offered sample increase proposal. Both markets will have options to increase minimum sample targets further.

The total PPM sample across all markets is expected to increase by approximately 10% in the aggregate for Persons aged 12+ by mid-year 2011 as a result of this plan.

"Over the past nine months, ARBITRON has made significant advancements to improve sample quality," ARBITRON Pres./CEO MICHAEL SKARZINSKI said. "As part of our ongoing quality initiatives, we have accelerated the prioritization of increasing our cell-phone-only sample. This new plan to increase sample targets for Persons aged 18-54 complements our recently announced commitment to increasing the number of cell-phone-only households in all PPM markets. We continue to lay the groundwork to help ensure that the radio industry has the state-of-the-art solutions and services that it will need to compete for the long-term."

Finishing A Little Later Than Expected

In his interview with ALL ACCESS, ROSE fleshed out the new details. "A little over a year ago, in JULY of '08, ARBITRON announced a plan to increase PPM sample targets by 10% and finish by end of year 2010," he said. "This announcement provides details behind that plan.

"Most of it is no different than the original plan. For instance, the total number of meters we plan on having has not changed. A couple things have changed; we initially said that we'd finish by the end of 2010, but we need to extend the time frame to complete the increase. About two-thirds of the increases will be accomplished by the end of 2010; we expect to be totally finished by mid-year 2011.

"Secondly, we're going to dedicate approximately 1% of the total increase for the purpose of increasing minimum sample targets in the smallest markets. We will have a list of those markets in the very near future.

"What that means is if you're in a big market -- say, SACRAMENTO, for instance -- your 12+ sample will increase by 9% and not 10%, as that 1% will go to help out smaller markets."

ROSE pointed out that in the main selling demo of 18-54, the increase will eventually end up at 10%, only that ARBITRON will accomplish this for all markets "a bit later" than originally planned. "We're doing this because, quite frankly, the smaller markets need [the extra increase] for better granularity and level of reporting."

About Those Rumors....

ROSE then turned his attention to the report that ARBITRON is rescinding its pledge to raise sample quality benchmarks and its average in-tab sample targets for cell phone-only households. Not so; it may miss a benchmark in one particular month, but it is not backing away from them.

"Frankly, we got into benchmarks on the advice of the ADVISORY COUNCIL, who wanted some sort of yardstick, a common metric to judge sample sizes. We established a number of them across different categories, such as 18-54, 18-34, Black and Hispanic. In essence, we have created our own report card, where we grade ourselves on a month-to-month basis. The goal is to get an A+, or a 100, pm each benchmark.

"Now I wasn't a straight-A, 4.0 student when I went to school, but I promised my parents I wouldn't get lower grades -- and when I did, I worked extra hard to get the grades up. The same thing applies here. If we don't meet a benchmark one month, we'll put extra effort into meeting it the next. So far, we've done it well enough to increase the benchmarks over time. As the sample performed better, we raised the benchmark to reflect that improvement.

"Our benchmarks and commitments to our clients remain unchanged. We commit that to our clients in our briefings, which are open to the public -- you can see what the numbers are. So while a casual reader might take a report that we're 'backing off' certain benchmarks at face value, that's just not the case. We remain committed to achieving those numbers and reporting on them on a month-to-month basis.

"Obviously, when we get less than our benchmark, our clients get upset, so it's in our best interests to be transparent about it and to address it. The fact that we have been transparent about it, over time, has made our samples a lot better than they used to be."

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