NEWS22 April 2010

Minority broadcasters and Arbitron settle PPM sampling dispute

Financials North America

US— Arbitron has settled its long-running dispute with minority owned broadcasters who claim that the ratings firm’s portable people meter-based (PPM) radio measurement system undercounts their audience and harms their advertising revenue.

The PPM Coalition (PPMC), an industry body formed to address PPM concerns, announced alongside Arbitron and the Media Ratings Council today that the parties would “move forward collaboratively” to address sampling issues.

Steps that will be taken to improve the sample include the addition of targeted in-person recruitment, increasing the 18-54 sample size by 10% by mid-2011 and the introduction of a panellist engagement metric.

Arbitron said that targeted in-person recruiting will start in high density black and Hispanic areas across the top 25 PPM markets by the end of the year. Address-based sampling and targeted in-person recruiting across all PPM market geographies will be implemented by the end of 2011.

A minority leadership council made up of agency and broadcasting figureheads will also be formed this year.

Arbitron CEO William Kerr (pictured) said: “We have worked with PPMC and the MRC to design these initiatives, and we believe they will help Arbitron deliver the quality data that our customers expect. These initiatives, together with other elements, are part of a larger ongoing program by Arbitron to obtain and retain PPM accreditation.”

Kerr also thanked House Oversight and Government Reform Committee chairman Edolphus Towns for “helping move this dialogue forward”.

Speaking on behalf of the PPM Coalition, ICBC Broadcast Holdings COO Charles Warfield said: “We believe that this agreement represents a positive step that moves both groups forward in a spirit of collaboration. This has been a long and difficult journey, but we are committed to working closely with Arbitron and the MRC and seeing the implementation of these initiatives.”

MRC chief executive George Ivie added: “We are pleased to see Arbitron agree to add these enhancements, which we believe can improve the quality of Arbitron’s currency ratings, and the MRC is proud to have been an independent and neutral component of this ongoing dialogue as requested by the House Oversight Committee.”

In other news today, Arbitron has reported a 2.6% drop in revenue to $95.9m for the first quarter of 2010. The firm said that one of the main reasons for the decline was the defection of diary clients Cumulus and Clear Channel to Nielsen’s rival radio ratings service in small to mid-size markets.

Operating income rose by 9.3% from $23.1m to $25.2m, while net income was up 11.4% from $12.3m to $13.7m.

Kerr said: “Our results in the first quarter do not fully reflect the progress we have made in our PPM commercialisation plan. We remain optimistic that an overall improvement in overall economic conditions will positively impact the advertising marketplace, which could favourably impact our customers and our own business.”

He flagged cross-platform measurement as an “important market” that the company intends to explore further, and Kerr has given chief financial officer Sean Creamer the added responsibility of leading cross-platform measurement activities.