NEWS15 July 2009

Florida AG sues to stop PPM ratings becoming ‘currency’

Legal North America

US— Florida attorney general Bill McCollum is suing Arbitron to prevent radio ratings based on its portable people meter (PPM) measurement system from becoming currency in the Miami-Fort Lauderdale-Hollywood market.

Arbitron is distributing data on June listening habits this week and effective yesterday, the company said, “PPM radio audience estimates for this market may be used as the basis for buy/sell transactions of radio commercial time”.

McCollum, however, has asked the courts to intervene and block Arbitron from using its PPM service for currency ratings in any radio market in Florida without receiving accreditation from auditing body the Media Rating Council (MRC).

He also wants the courts to declare Arbitron in violation of the state’s Deceptive and Unfair Trade Practices Act if it continues to distribute PPM ratings as currency without MRC accreditation.

Similar to legal challenges mounted by the attorneys general of New York and New Jersey – which have since been settled – McCollum alleges that Arbitron’s PPM sampling methodology under-represents minority ethnic groups and therefore undercounts the audience for radio stations targeting these groups.

In his complaint, McCollum claims that pre-currency PPM ratings in the Miami-area market “show significant decreases for several minority broadcasters” and that advertising agencies are already seeking to negotiate “a 30-50% discount in their rates in anticipation of the currency ratings”.

He claims: “The flawed ratings would threaten the viability of radio stations in the Miami area and elsewhere in Florida that air programming targeted to minorities because those stations will be unable to fairly compete for advertising sales.”

Arbitron declined to comment on the lawsuit when contacted by Research. However CEO Michael Skarznski told a hearing of the House Committee on the Judiciary last week that the representation of Black and Hispanic groups in the PPM sample was “strong” – though the firm has previously acknowledged difficulties in recruiting ethnic minority panelists and ensuring they regularly carry their PPM device.

The company has also stated on prior occasions that differences between listening figures from the PPM systems and the paper diary-based method it replaces are due to the fact that PPM measures actual listening, while diaries only measure recall and loyalty.

Both the Federal Communications Commission and the House Oversight and Government Reform Committee are holding inquiries into the impact PPM is having on minority broadcasters.