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Arbitron Enhancements Go Nationwide
Radio ratings giant Arbitron has confirmed that it will be extending methodological enhancements from New Jersey, New York and Maryland to all PPM markets. The firm has also announced a new multi-year deal for diary-based ratings, and discussed revenue changes in a 10-K filing.
The enhancements, originally agreed for the three states (MD, NJ, NY) following investigations by their Attorneys General, cover four key areas: cellphone-only sampling; address-based sampling; In-Tab compliance rates; and response metrics in terms of Sample Performance Indicator or SPI.
The firm also committed itself to greater transparency for more of its sample metrics in all PPM markets, including the distribution of sample by zip code and by cell phone status; and to sharing current and future findings of the impact of nonresponse with its clients.
Recently appointed President and CEO Michael Skarzynski said: 'I am committed to continue our focus on the concerns of our PPM market customers in terms of the sample size, sample proportionality and sample quality of our PPM panels. I want to assure the industry that Arbitron is actively engaged in the continuous improvement of our PPM and Diary market services. Thanks to specific customer input, Arbitron is already making good progress on improvements in many operational areas.' He added that the company was 'on track to meet or exceed 100 percent of the settlement agreement criteria with the Attorneys General of New York, New Jersey and Maryland', emphasizing again that this formed an integral part of ongoing improvements.
Specifically, for all PPM markets Arbitron has committed to:- increase the sample target for cell-phone-only households to an average of 15% by year-end 2010, and 12.5% by year-end 2009.
- the use of address-based sampling technique for at least 10% of its sampling efforts by late 2009 and 15% of its recruitment efforts by the end of December 2010 in all PPM markets. Initial returns from the first round of address-based sampling are indicating that markets such as Nassau-Suffolk and Middlesex-Somerset-Union have a cell-phone-only penetration that is significantly less than 15%.
- an average-daily in-tab benchmark of 75% of installed sample
- improving its Sample Performance Indicator (SPI). Based on progress to date, Arbitron has informed the MRC that it hopes to achieve a 21% SPI average across all PPM markets by the end of 2010.
- include greater transparency in terms of information regarding PPM sample composition and other PPM metrics, to help clients understand the strengths and limitations of PPM samples.
- installation and in-tabulation data by individual zip code, along with market population data for Blacks, Hispanics and others (non-Black or non-Hispanic) for each individual zip code.
- feed through findings from a nonresponse bias study to be conducted in the New York market by July 15, inform clients of the identified sources of any measurable statistical bias found, and take reasonable measures to address those sources.
The company says it has discussed with broadcasters the possibility of analysing Hispanic sample by country of origin, and has conducted a test of three markets selected by the Spanish Radio Association (Houston-Galveston, Los Angeles and New York) to determine if asking the country of origin question during one of the regular status calls to PPM households would have an adverse impact on the PPM sample. Early results indicate that the quality of the sample would be unaffected, but a decision on whether to ask the question is not yet made.
Also this week, the company announced that it has signed multi-year agreements with GAP Broadcasting, LLC and GAP Broadcasting II, LLC for diary-based radio ratings services in 17 markets. The agreement includes software services for all stations in the 17 markets and Arbitrends monthly rolling-average reports in Shreveport, LA, a market that Arbitron measures all year round.
Skarzynski made similar assertions last week in a letter to US Sen. Robert Menendez (D-NJ), who had raised questions about the accuracy of the PPM methodology in counting Hispanics and other minorities. The letter followed a meeting between the two earlier in February, and also noted the positive impact of the new system and of clients learning to use it: 'We have seen changes in the ratings of many stations as programmers have made adjustments in the presentation of their programming. We have seen Urban radio come back in Houston-Galveston to consistently take the top spot. We have seen Spanish-language radio rise to number one in Dallas, which was not the case in the Diary service.'
Meanwhile, MRC accreditation for the PPM in Philadelphia, New York, Nassau - Suffolk (Long Island), and Middlesex - Somerset - Union local markets is being held up, according to Arbitron's 10-K filing with the SEC today, by MRC issues over factors including response rates, compliance rates, and differential compliance rates. The MRC has not yet taken action on the accreditation applications for Los Angeles, Chicago, San Francisco, San Jose, Atlanta, Dallas-Ft. Worth, Detroit and Washington, DC.
The filing also gives a glimpse of Arbitron's expectations for the revenue effects of PPM introduction, and the effect of recent defections to a new Nielsen radio ratings service. The company expects radio audience ratings services to increase further their share of total revenue: it rose from 79% in 2006 and 2007 to 81% in 2008, with related software revenue still at an additional 9%. Current multi-year licence agreements for the PPM generally provide for a higher license fee than diary-based agreements, and the figures therefore reflect the beginnings of PPM implementation. The company reported Q4 and full-year results on Feb 17th.
On the Nielsen competition, the filing says: 'The signing of Cumulus and Clear Channel with Nielsen for the radio ratings service in certain small to mid-sized markets is anticipated to adversely impact our expected revenue by approximately $5.0m in 2009 and thereafter the impact will be approximately $10.0m per year on our expected annual revenue.' Despite this, 'Our net revenue growth for 2009 is expected to approximate the same percentage rate of growth as that of 2008.'
Arbitron says it is 'actively seeking opportunities to diversify our revenue base by, among other things, leveraging the investment we have made in our PPM technology by exploring applications of the technology beyond our domestic radio ratings business.'
Web site: www.arbitron.com .
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