Arbitron to make major change in way radio listeners are measured
Triangle Business Journal
RALEIGH – Even as the latest Arbitron data were released this month, a radio ratings storm was brewing – one that threatens to blow away much of the market’s conventional wisdom.
The tempest is called the Portable People Meter, or PPM, and it’s a slow moving storm that won’t hit Raleigh until 2010. But like meteorologists with a hurricane tracking chart, local media buyers already are following the new ratings technology’s progress as it sweeps inexorably toward the Triangle.
So while K 97.5, FOXY 107.1 and Mix 101.5 claimed the top spots in the spring 2008 ratings, the bigger story is what’s going to happen to all the ratings when PPM supplants the old pencil-and-paper diary method in this market in September 2010.
“They’re going to change significantly,” Chip Allen, a vice president who oversees media buying at Genesis Marketing Partners, says of the local ratings. He expects the PPM to benefit stations further down the rankings ladder.
“They’re the ones … not being remembered when (Arbitron survey respondents) write down their diaries,” he says.
With the diary system, a sampling of residents keep track of the stations they listen to and send the data to Arbitron weekly. The decades-old method is fraught with problems. People tend to round off the amount of time they listen, or they “remember” that they spent more time tuned into their favorite station than they actually did.
Because participants fill out diaries for only a week at a time, the ratings for some stations can swing dramatically, depending on the number of people who actually respond each week.
Arbitron’s solution is the Portable People Meter, a device roughly the size of a pager that electronically tracks its user’s listening habits. At the end of the day, the user hooks the PPM up to a docking station, and it transmits its data to Arbitron.
“It’s going to be more accurate, and I’m all for that,” says Mix 101.5 Program Director Barry Fox. “I believe that agencies and buyers can buy with more confidence when People Meter gets here.”
The new technology also could cause price upheavals in the market. Currently, a 60-second spot on a top station in morning drive time costs around $325, says Allen. The price is as low as $35 during a less popular time slot on a station with more pedestrian ratings.
Liz Wallace, the director of corporate affairs at Rocky Top Hospitality, says it’s a positive for advertisers any time they can get better information. “It sounds very exciting,” she says of the PPM.
Rocky Top, which owns Twisted Fork, Hi5 and other Raleigh restaurants, advertises on Triangle radio stations every week.
Media buyers at Cary media agency MRPP Inc. say that stations’ ratings typically go down once PPM comes into a market. That’s because people tend to overestimate the amount of time they listen to the stations they list in their diaries.
PPM data also show that people typically listen to a greater number of stations in a week (six) than what they list in their diaries (3 to 3 1/2).
Such discoveries will fuel a struggle during pricing negotiations. Ad buyers will cite the lower ratings, while some stations will tout the fact that they reach more listeners than previously recorded.
“It’s a new game,” says MRPP President Sue Toth. “There’ll be new rules.”
While the PPM rollout has prompted some complaints from broadcasters, Arbitron Vice President John Snyder says his company is providing education and support to help both media buyers and sellers in the transition.
“There’s always going to be concerns,” says Snyder, who adds that the launches have gotten smoother as they’ve gone along.
PPM was introduced in Philadelphia and Houston in 2007.
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